Notes to Accounts of Sunil Healthcare Ltd.

Mar 31, 2018

1 Reporting Entity

Sunil Healthcare Limited referred as “the Company” is domiciled in India. The registered office of the Company is at 38E/252A, Vijay Tower, Shahpurjat, New Delhi. Equity shares of the Company are listed in India on the Bombay stock exchange and the Calcutta stock exchange.

The Company has manufacturing plant in Alwar (Rajasthan), India. The Company is a manufacturer of Empty Hard Gelatin and HPMC Capsule Shells. The Company is also doing Trading of Food Items.

The financial statements of the company for the year ended 31st March 2018 were authorized for issue in accordance with a resolution of the directors on 25th May, 2018.

2 First TimeAdoption of Ind AS

As stated in note 2, these are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS statement of financial position at 1st April, 2016 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A IndAS optional exemptions

i) ”Deemed costInd AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets except land at their previous GAAP carrying value.”

ii) ”Effect of changes in exchange rateIn respect of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period, the Company has elected to recognise exchange differences on translation of such long term foreign currency monetary items in line with its Previous GAAP accounting policy.In respect of long term foreign currency monetary items recognised in the financial statements beginning with the first Ind AS financial reporting period, exchange differences are recognised in the statement of profit and loss.”

iii) ”LeasesAppendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception ofthe contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to IndAS, except where the effect is expected to be not material. The Company has elected to apply this exemption forsuch contracts/arrangements.”

B IndASmandatory exceptions

i) ”EstimatesAn entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.Ind AS estimates as at 01st April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with IndAS at the date of transition as these were not required under previous GAAP.”

ii) ’’Classification and measurement of financial assetsInd AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.”

C Reconciliations between previous GAAP and IndAS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to IndAS.

D Notes to first-time adoption:

1 Property Plant and Equipments

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as at 01 April, 2016 measured as per the previous GAAP except leasehold land which has been fairvalued and use that carrying value as the deemed cost ofthe property, plant and equipment and intangible assets. The resulting impact of fair valuation of land is Rs 1041.86 Lakhs and a positive impact of Rs.801.12Lakhs is reflected in the reserves as on 31/3/16.

As per IndAS 16, Property Plant and Equipment, Company has decapitalised certain costs which were capitalised as a part of cost of fixed assets under previous GAAP. Such costs along with accumulated depreciation on such costs have been decapitalised on the date of transition. During the year ended 31 March 2016 depreciation expense was derecognised under IndAS for such items of Property Plant and Equipments which was charged to statement of profi t and loss under previous GAAP.

2 Borrowings

“Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part ofthe interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss and PPE as and when incurred. Accordingly, borrowings as at 31 March 2017 have been reduced by Rs. 4.20 Lakhs (1 April 2016- Rs.Nil Lakhs) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount of retained earning. The profit for the year ended 31 March 2017 reduced by Rs. 1.27 Lakhs as a result ofthe additional interest expense.”

3 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the netdefined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss forthe year.

4 Trade receivables

Under previous GAAP, the Group had created provision for doubtful debts based on specific amount for incurred losses. Under Ind AS, the allowance for doubtful debts has been determined based on expected credit loss model.

5 Fair valuation ofderivatives

The company has taken forward contracts to hedge foreign currency receivables/ payable. Under previous GAAP, AS 11 accounting was followed to account for these contracts. Under IndAS all these derivatives has been valued at fair value as per Ind AS 109. This has decreased retained earnings by Rs. 13.56 Lakhs as at 31 March 2017 and decreased retained earnings by Rs. 8.48 lakhs.

6 Other comprehensive income

Under IndAS, all items of income and expense recognised in a period should be included in statement of profit & loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in statement of profit & loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans and taxthereon.The concept of other comprehensive income was not there under previous GAAP.

7 Deferred Tax

Under previous GAAP, deferred tax was prepared using income statement approach. Under Ind AS, company has prepared deferred tax using balance sheet approach. Also, deferred tax have been recognised on the adjustments made on transition to IndAS.

8 Retained earnings

Retained earnings as atApril 1,2016 has been adjusted consequent to the above IndAS transition adjustments.

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Mar 31, 2016

C. Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the share holders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

* includes Rs. 5.36 lakhs carrying amount of fixed assets (after retaining the residual value),whose remaining useful life have been reassessed to be nil at the beginning of the Year has been adjusted with General Reserve.( Previous Year Rs.134.16)

1 (i) The company has exercised option under notification no. GIR 914 (E) dated 29th December 2011 issued by Ministry of Corporate Affairs and accordingly net exchange loss for the year amounting to Rs.27.05 (Previous year Rs.NIL ) on long term foreign currency borrowing has been adjusted with the depreciable fixed assets acquired. As at 31st March 2016 Rs.21.59 (Previous year Rs.NIL) remain to be amortized over the balance life of the assets.

(Previous year Rs.NIL ) on long term foreign currency borrowing has been adjusted with the depreciable fixed assets acquired. As at 31st March 2016 Rs.21.59 (Previous year Rs.NIL) remain to be amortized over the balance life of the assets.

2 Other Notes on Accounts

3 Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

4 In the opinion of the management, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.

5 Segment Information’s

^a As of March 31, 2016, there are two business segments i.e. Empty Capsules and Marketing of Food Product. A description of the types of products by each reportable segment is as follows:

Empty Capsules - the Company deals in manufactures or trading of Capsule Shells Marketing of Food Product includes trading activities carried out on high sea sales basis.

Segment Reporting (by business segment):

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2016 and March 31, 2015 and certain assets and liability information regarding business segments at March 31, 2016 and March 31, 2015.

6 The previous year figure has been reclassified /regrouped to conform current year figures.

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Mar 31, 2015

1. Nature of Operation

The Company has manufacturing facility at Alwar (Rajasthan) for 8430 Million (Previous year 7700 Million) of Hard Gelatin Capsule Shells. Comapany is also doing Trading of Food items.

2. Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the share holders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

(a) Term Loans are Secured by specific Plant & Machineries and other immovable or movable fixed Assets, purchased against specific loan and carries interet rate of 14.70% p.a.(Previous year 14.70% p.a.) The same is also personally guaranteed by Chairman cum Managing director and a relative. Payment terms of Term loans of non-current portion is as follows:

(a) Cash Credit is Secured by first charge by way of hypothecation on the entire stock of inventories, receivables, bills, and other chargeable current assets of the company (both present and future) and extension of first mortgage / hypothecation charge on the entire fixed assets of the company. The same is also personally guaranteed by Chairman cum Managing director and a relative.

3. Contingent Liabilities and Commitments

A. Contingent Liabilities

(a) . Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85 (Paid under Protest Rs. 0.85 Previous year Rs. 0.85)

(b) Liability for Customs duty on capital Goods imported under EPCG Scheme, against which export obligation is to be fulfilled. 7.45 NIL

(c) Liability for Customs duty on Raw Materials imported under Advance License, against which export obligation is to be fulfilled. 347.28 453.64

B. Commitments

(a). Estimated amount of contracts remaining to be executed on capital account and not provided for 301.75 10.95 "(Advances paid Rs. 154.31 Previous Year Rs. 7.54)"

4. Other Notes on Accounts

5. Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

6. In the opinion of the management ,the Current Assets, Loans and Advances are approximately of the value stated,if realised in the ordinary course of business.

B. "Disclosure relating to Provident Funds

The Company recognised Rs. 42.66 (Previous year Rs. 37.95) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. "

7. Segment Informations

a As of March 31, 2015, there are two business segments i.e. Empty Hard Gelatin Capsule and Marketing of Food Product. A description of the types of products by each reportable segment is as follows:

Empty Hard Gelatin Capsule - the Company deals in manufactures of EHG Capsule Shells Marketing of Food Product includes trading activities carried out on high sea sales basis. b Segment Reporting (by business segment):

The following table presents revenue and profit information regarding business segments for the years ended March 31,2015 and March 31, 2014 and certain assets and liability information regarding business segments at March 31, 2015 and March 31, 2014.

c Segment Reporting (by Geographical demarcation):

(a) . The segment is based on geographical demarcation i.e. India and Rest of the World.

(b) . The Company's revenue from external customers and information about its assets and others by geographical location are follows:

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Mar 31, 2014

1. CASH FLOW FROM FINANCING ACTIVITIES

Notes:

1. The Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard (AS) 3 "Cash flow Statement" as notified under the Companies (Accounting Standard) Rule 2006.

2. Figures have been regrouped/rearranged wherever necessary.

2. SHARE CAPITAL

Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

3 RESERVES AND SURPLUS:

(a) Term Loans are Secured by specific Plant & Machineries ando ther immovable or movable fixed Assets, purchased against specification. The same isalso person all yguaran teed by Chairman cum Managing director and a relative. Payment of Term loan so fnon-current portion and rate of interest payable is as follows:

(b) Loans from Chairman Cum Managing Director of Rs. 5.40 is interest free (Previous year Rs.12.63)

(c) Loan from other saggre gate of Rs.22.69 payable in 11 monthly instalments w.e.f. 3rd March 2013 and carries rate of interest 19.29% p.a. (d) Loan from others aggregate of Rs.33.72 payable in 24 monthly instalments w.e.f. 29th March 2014 and carries rate of interest 19.67%p.a.

(e) Loan from others aggregate of Rs.23.65 payable in 22 monthly instalments w.e.f. 07th February 2014 and carries rate of interest 19.51%p.a

4. Short Term Borrowings

(a) Cash Credit is Secured by first charge by way of hypothecation on the entire stock of inventories, receivables, bills, and other chargeable current assets of the company (both present and future) and extension of first mortgage / hypothecation charge on the entire fixed assets of the company. The same is also personally guaranteed by Chairman cum Managing director and a relative.

5. Trade Payables

The Company has not received any intimation from its suppliers being registered under Micro, Small and Medium Enterprises Development Act,2006(MSME).Hence the necessary disclosure required under MSME-Act-2006 cannot be made.

6 Contingent Liabilities and Commitments

A. Contingent Liabilities As at 31/03/2014 31/03/2013

(a) Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85

(Paid under Protest Rs 0.85 Previous year Rs.0.85)

(b) Customs duty on capital Goods imported NIL 6.51 under EPCG Scheme, against which export obligation is to be fulfilled.

(c) Customs duty on Raw Materials imported 453.64 363.86 under Advance License, against which export obligation is to be fulfilled.

7.1.1 Exceptional item reported for Rs NIL (Previous year 55) received from a Debtor which was written off in earlier year.

7.1.2 Some of the Trade Receivable, Payable, Borrowing and Loans & Advances are Subject to Confirmation.

7.1.3 In the opinion of the management, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

7.1.4 Disclosure required by Accounting Standard (AS) 15 (Revised) on "Employee Benefits":

The estimates of the future salary increases, considered in actuarial valuation, taken account of inflation, seniority, promotion and other relevant factors. Gratuity upto certain amount per employee is covered under an irrevocable Gratuity Fund under the Group Gratuity cum Life Assurance Scheme of the Life

Insurance Corporation of India. The Company has also recognised 37.95/- (Previous Year Rs. 31.96/-) being contribution to employees'' Provident Fund (Defined Contribution Plan)

7.1.5 Segment Informations

a Company''s business activity falls within a single primary business segment viz EHG Capsule Shells

b Segment Reporting (by Geographical demarcation):

(a). The segment is based on geographical demarcation i.e. India and Rest of the World.

(b). The Company''s revenue from external customers and information about its assets and others by geographical location.

7.1.6 The company has no outstanding derivative instrument as at Balance Sheet date.

7.1.7 The previous year figure has been reclassified /regrouped to conform current year figures.

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Mar 31, 2013

1. Contingent Liabilities and Commitments

A. Contingent Liabilities

(a) Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85

(Paid under Protest Rs.0.85 Previous year Rs.0.85)

(b) Customs duty on capital Goods imported under EPCG 6.51 Nil Scheme, against which export obligation is to be fulfilled.

(c) Customs duty on Raw Materials imported under Advance 363.86 126.22 License, against which export obligation is to be fulfilled.

B. Commitments

(a) Estimated amount of contracts remaining to be executed 45.36 544.32 on capital account and not provided for (Advances paid Rs. 6.84 Previous Year Rs.221)

2. Notes on Accounts

3. Exceptional item reported for Rs. 55 Lacs received from a Debtors which was written off in earlier year

4. Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

5. In the opinion of the management ,the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

6. Disclosure required by Accounting Standard (AS) 15 (Revised) on "Employee Benefits":

The estimates of the future salary increases, considered in actuarial valuation, taken account of inflation, seniority, promotion and other relevant factors. Gratuity up to certain amount per employee is covered under an irrevocable Gratuity Fund under the Group Gratuity cum Life Assurance Scheme of the Life Insurance Corporation of India. The Company has also recognised Rs.31.96/- (Previous Year Rs.25.56/-) being contribution to employees'' Provident Fund (Defined Contribution Plan)

7. Segment Information’s

a Company''s business activity falls within a single primary business segment viz EHG Capsule Shells

b Segment Reporting (by Geographical demarcation):

(a) The segment is based on geographical demarcation i.e. India and Rest of the World.

8. b) The company has no outstanding derivative instrument as at Balance Sheet date.

9. The previous year figure has been reclassified /regrouped to conform current year figures.