Accounting Policies of Ankur Drugs & Pharma Ltd. Company

Mar 31, 2011

I. Basis of Accounting:

The financial statements are prepared under the historical cost convention on going concern basis. The Company generally follows the mercantile system of accounting and recognises the income and expenditure on accrual basis except those with significant uncertainties and comply with accounting standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

II. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction, including taxes and pre-operative expenses capitalised less accumulated depreciation.

III. Impairment of Assets:

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceed the recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which the Asset is identified as being impaired.

IV. Depreciation :

a] The Depreciation on Fixed Assets is provided on straight-line method, in accordance with the Schedule XIV of the Companies Act, 1956.

b] The Depreciation on Assets added during the year has been provided on pro-rata basis with reference to the date on which the assets were put to use.

c] No depreciation has been provided on the fixed assets, which have not been put to use during the year.

V. Valuation of Inventories :

a] Raw material, Packing material, Consumable Stores and spares are valued at lower of cost or net realisable value.

b] Work-in-Progress and Finished goods are valued at lower of cost or net realisable value.

c] Work-in-Progress and Finished goods include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

VI. Investments :

The long term investments [unquoted] are stated at cost. The Income from investments is accounted for when received. The provision for diminution in value of other investments have been made considering their realisable value as at the end of financial year.

VII. Provisions :

The provisions are recognized when the Company has a present obligation as a result of past events; it is more likely that an outflow of resources will be required to settle the obligation and the amount have been reliably estimated.

VIII. Employees Benefits :

Short Term Employee Benefits

All employee benefits payable within twelve months of rendering service are recognized in the period in which the employee renders the related service.

Post Employment / Retirement Benefits

Contribution to Defined Contribution Plans such as Provident Fund etc., are charged to the Profit and Loss Account as incurred. Gratuity

As per AS -15 [Revised] 2005 of ICAI read with Accounting Standard Board Guidance, the provision for liability in respect of gratuity has not been computed and provided by the Company in the books for the period under review.

IX. Borrowing Cost:

The interest and other costs incurred in connection with the borrowing of the funds are charged to revenue on accrual basis except those' which are directly attributable to the acquisition of the fixed assets, which necessarily take a substantial time to get ready for their intended use. Such costs are capitalised to the respective fixed assets.

X. Revenue Recognition:

The gross sales are inclusive of excise duty wherever applicable, but net of sales tax, returns and trade discounts. The Company recognizes sales when significant risks and rewards related to ownership are transferred to the buyers.

XI. Foreign Exchange Transactions:

The transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Any other exchange difference is dealt with in Prof it and Loss Account.

XII. Taxation :

During the year the company has incurred the loss therefore no provision has been made for current income tax liability on the basis of assessable profits computed in accordance with the provisions of Income Tax Act, 1961

Deferred Tax is recognized, subject to the consideration of prudence, on timing of differences, being the difference between taxable income and accounting income that originate in one period and are capable of being reversed in one or more subsequent periods.

The company has made the provision for balance income-tax Liability upto F Y 2008-09 [A Y 2009-10] as per rectification/assessment order received by the company and the tax payments have been set-off against the provision in the Balance Sheet.

XIII. Miscellaneous Expenditure:

The Company has spent huge amount on generating real time stability data of the product, Product Development of NDDS and regular dosage form and product license/quota approvals from Drug Controller General of India/Narcotic Department. The Company is going to be benefited by this investment in long run and more over, the company has got the marketing rights of NDDS for next 15 years. Therefore the Company has decided to write off this Expenditure over a period of 15 years commencing from next financial year.

XIV. Accounting for CENVAT Credit:

CENVAT benefit is accounted for by reducing the purchase cost of Material/ Fixed Assets, where CENVAT credit is available.

XV. Earnings Per Share :

The earnings considered in ascertaining the Company's EPS are computed as per Accounting Standard 20 on "Earning Per Share", issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares js anti-dilutive.

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Mar 31, 2010

I. Basis of Accounting :

The financial statements are prepared under the historical cost convention on a going concern basis. The Company generally follows the mercantile system of accounting and recognises the income and expenditure on accrual basis except those with significant uncertainties and comply with accounting standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

II. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction, including taxes and pre-operative expenses capitalised less accumulated depreciation.

III. Impairment of Assets :

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceed the recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which the Asset is identified as being impaired.

IV. Depreciation :

a] The Depreciation on Fixed Assets is provided on straight-line method, in accordance with the Schedule XIV of the Companies Act, 1956.

b] The Depreciation on Assets added during the year has been provided on pro-rata basis with reference to the date on which the assets were put to use.

c] No depreciation has been provided on the fixed assets, which have not been put to use during the year.

V. Valuation of Inventories :

a] Raw material, Packing material, Consumable Stores and spares are valued at lower of cost or net realisable value.

b] Work-in-Progress and Finished goods are valued at lower of cost or net realisable value.

c] Work-in-Progress and Finished goods include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

VI. Investments :

The long term investments [unquoted] are stated at cost. The Income from investments is accounted for when received. The provision for diminution in value of other investments have been made considering their realisable value as at the end of financial year.

VII. Provisions :

The provisions are recognized when the Company has a present obligation as a result of past events; it is more likely that an outflow of resources will be required to settle the obligation and the amount have been reliably estimated.

VIII. Employees Benefits :

Short Term Employee Benefits

All employee benefits payable within twelve months of rendering service are recognized in the period in which the employee renders the related service.

Post Employment / Retirement Benefits

Contribution to Defined Contribution Plans such as Provident Fund etc., are charged to the Profit and Loss Account as incurred.

Gratuity

As per AS - 15 (Revised) 2005 of ICAI read with Accounting Standard Board Guidance, the provision for liability in respect of gratuity has not been computed and provided by the Company in the books for the period under review.

IX. Borrowing Cost :

The interest and other costs incurred in connection with the borrowing of the funds are charged to revenue on accrual basis except those which are directly attributable to the acquisition of the fixed assets, which necessarily take a substantial time to get ready for their intended use. Such costs are capitalised to the respective fixed assets.

X. Revenue Recognition :

The gross sales are inclusive of excise duty wherever applicable, but net of sales tax, returns and trade discounts. The Company recognizes sales when significant risks and rewards related to ownership are transferred to the buyers.

XI. Foreign Exchange Transactions :

The transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Any other exchange difference is dealt with in Profit and Loss Account.

XII. Taxation :

The Provision for current income tax liability is ascertained on the basis of assessable profits computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax is recognized, subject to the consideration of prudence, on timing of differences, being the difference between taxable income and accounting income that originate in one period and are capable of being reversed in one or more subsequent periods.

In case where the tax assessments have been completed but the appeals are pending, the tax payments have been set-off against the provision in the Balance Sheet. The disclosure in respect of the contingent liabilities has been made in para 2 [III] below.

XIII. Miscellaneous Expenditure :

One-Tenth of Preliminary and Public Issue Expenses and One Third of Brand Assignment charges and Exhibition Expenses have been written off during the year.

XIV. Accounting for CENVAT Credit :

CENVAT benefit is accounted for by reducing the purchase cost of Materials/ Fixed Assets, where CENVAT credit is available.

XV. Earnings Per Share :

The earnings considered in ascertaining the Companys EPS are computed as per Accounting Standard 20 on “Earning Per Share”, issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.