Accounting Policies of Raaj Medisafe India Ltd. Company

Mar 31, 2024

3. SIGNIFICANT ACCOUNTING POLICIES:

A) Property, Plant & Equipment (PPE) - Property, plant and equipment is stated at acquisition or construction cost net

of accumulated depreciation, amortization and accumulated impairment losses, if any. Property, plant and equipment acquired in a business combination are recognized at carrying amount before merger date. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance cost are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”.

At balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite lives may be impaired. If any such impairment exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets not yet available for use are tested for impairment annually at each balance sheet date, or earlier, if there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable

amount. An impairment loss is recognized immediately in the statement of Profit and Loss

B) Depreciation on PPE - Depreciation is provided on a pro-rata basis on the straight line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013. Depreciation on additions to property, plant and equipment is provided on a pro-rata basis from the date of acquisition or installation or construction, when the asset is ready for intended use.

No asset is impaired during the year. In respect of an asset for which impairment loss, if any, is recognized, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted, if appropriate.

C) Inventories - Inventories are valued after providing for obsolescence, as follows:

I) Raw materials, stores and spare parts and packing material:

Lower of cost and net realizable value. Cost includes purchase price, other costs incurred in bringing the inventories to their present location and condition, and taxes for which credit is not available. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. If the value of inventories is expected to be sold below cost then it is valued at NRV and deducted from the cost of the Main Product

II) Work-in-progress, finished goods and stock in trade:

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, but excluding borrowing costs. Cost of stock-intrade includes cost of purchase and other cost incurred in bringing the inventories to the present location and condition. Cost is determined on a weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

D) Cash Flows - Cash Flow Statement is prepared by the “Indirect method” set out in Ind AS 7 on “Statement of Cash Flow” and presents the cash flow by operating, investing and financing activities of the company. Cash and Cash equivalents presented in Cash Flow Statement consist of Cash on Hand and demand deposits with banks.

E) Investment in subsidiaries, associates and joint arrangements - There is no subsidiary company of the company, also the company has neither obtained any economic benefit from its activities nor did the company entered into any joint arrangement with any entity. Hence, Ind AS 28, Ind AS 110, Ind AS 111 and Ind AS 112 are not applicable.

F) 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. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through the statement of profit and loss are recognized immediately in the statement of profit and loss.

I) Financial Assets -

(a) The Company’s financial assets comprise:

i) Current financial assets mainly consist of trade receivables, cash and cash equivalents, bank balances, fixed deposits with banks and financial institutions and other current loans, advances & receivables.

ii) Non-current financial assets mainly consist of financial investments in equity.

(b) Initial recognition and measurement of financial assets:

All regular way purchases or sales of financial assets are recognised and de-recognised on a trade date basis.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the

time frame established by regulation or convention in the marketplace.

(c) Subsequent measurement of financial assets:

i) Cash and cash equivalents - Cash and cash equivalents consist of cash on hand&balances in current accounts held in the name of the company. During the year, if company has surplus funds for shorter period, as part of Company’s cash management policy, it parks its surplus funds in short-term highly liquid instruments that are generally held for a period of three months or less from the date of acquisition. These short-term highly liquid instruments are readily convertible into known amounts of cash and are subject to insignificant risk of changes in value.

ii) Other Balances with Banks - Fixed deposits, either free or liened whose maturities are within a period of 12 months are part of the other bank balances. It also includes debit balances, if any, in loan accounts.

iii) Trade Receivables & Other Current Financial Assets- Trade receivables, loans& other current financial assets are initially recognized at fair value. Subsequently, trade receivable need to be held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

iv) Equity Instruments - Equity instruments, which are held for trading, are classified as at FVTPL. Equity instruments included within the FVTPL category should be measured at fair value with all changes recognized in the statement of profit and loss. The unquoted equity shares should be fair valued on the basis of available fair value. Due to non-availability of fair value of unquoted equity shares, the same is being carried in financial statements at cost.

(d) De-recognition of financial assets:

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is

primarily derecognized when:-

i) The rights to receive cash flows from the asset have expired, or

ii) The Company has transferred its contractual rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the statement of profit and loss if such gain or loss would have otherwise been recognised in the statement of profit and loss on disposal of that financial asset.

II) Financial Liability -

(a) The Company’s financial liability comprise:

i) Non-current financial liabilities mainly consist of borrowings.

ii) Current financial liabilities mainly consist of trade payables, staff related and other payables.

(b) Subsequent measurement of financial liabilities:

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent reporting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest rate method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs’ line item.

(c) De-recognition of financial liabilities:

A financial liability is de-recognised when the obligation under the liability is discharged or 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 the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

III) Offsetting of financial instruments - Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

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Mar 31, 2023

3. SIGNIFICANT ACCOUNTING POLICIES:

A) Property, Plant & Equipment (PPE) - Property, plant and equipment is stated at acquisition or construction cost net of accumulated depreciation, amortization and accumulated impairment losses, if any. Property, plant and equipment acquired in a business combination are recognized at carrying amount before merger date. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance cost are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”.

At balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite lives may be impaired. If any such impairment exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets not yet available for use are tested for impairment annually at each balance sheet date, or earlier, if there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be

less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of Profit and Loss

B) Depreciation on PPE - Depreciation is provided on a pro-rata basis on the straight line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013. Depreciation on additions to property, plant and equipment is provided on a pro-rata basis from the date of acquisition or installation or construction, when the asset is ready for intended use.

No asset is impaired during the year. In respect of an asset for which impairment loss, if any, is recognized, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted, if appropriate.

C) Inventories - Inventories are valued after providing for obsolescence, as follows:

I) Raw materials, stores and spare parts and packing material:

Lower of cost and net realizable value. Cost includes purchase price, other costs incurred in bringing the inventories to their present location and condition, and taxes for which credit is not available. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. If the value of inventories is expected to be sold below cost then it is valued at NRV and deducted from the cost of the Main Product

II) Work-in-progress, finished goods and stock in trade:

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, but excluding borrowing costs. Cost of stock-in-trade includes cost of purchase and other cost incurred in bringing the inventories to the present location and condition. Cost is determined on a weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

D) Cash Flows - Cash Flow Statement is prepared by the “Indirect method” set out in Ind AS 7 on “Statement of Cash Flow” and presents the cash flow by operating, investing and financing activities of the company. Cash and Cash equivalents presented in Cash Flow Statement consist of Cash on Hand and demand deposits with banks.

E) Investment in subsidiaries, associates and joint arrangements - There is no subsidiary company of the company, also the company has neither obtained any economic benefit from its activities nor did the company entered into any joint arrangement with any entity. Hence Ind AS 28, Ind AS 110, Ind AS 111 and Ind AS 112 are not applicable.

F) 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. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair valuethrough the statement of profit and loss are recognized immediately in the statement of profit and loss.

I) Financial Assets -

(a) The Company’s financial assets comprise:

i) Current financial assets mainly consist of trade receivables, cash and cash equivalents, bank balances, fixed deposits with banks and financial institutions and other current loans, advances & receivables.

ii) Non-current financial assets mainly consist of financial investments in equity.

(b) Initial recognition and measurement of financial assets:

All regular way purchases or sales of financial assets are recognised and de-recognised on a trade date

basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of

assets within the time frame established by regulation or convention in the market place.

(c) Subsequent measurement of financial assets:

i) Cash and cash equivalents - Cash and cash equivalents consist of cash on hand & balances in current accounts held in the name of the company. During the year, if company has surplus funds for shorter period, as part of Company’s cash management policy, it parks its surplus funds in short-term highly liquid instruments that are generally held for a period of three months or less from the date of acquisition. These short-term highly liquid instruments are readily convertible into known amounts of cash and are subject to insignificant risk of changes in value.

ii) Other Balances with Banks - Fixed deposits, either free or liened whose maturities are within a period of 12 months are part of the other bank balances. It also includes debit balances, if any, in loan accounts.

iii) Trade Receivables & Other Current Financial Assets-Trade receivables, loans& other current financial assets are initially recognized at fair value. Subsequently, trade receivable need to be held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

iv) Equity Instruments - Equity instruments, which are held for trading, are classified as at FVTPL. Equity instruments included within the FVTPL category should be measured at fair value with all changes recognized in the statement of profit and loss. The unquoted equity shares should be fair valued on the basis of available fair value. Due to non availability of fair value of unquoted equity shares, the same is being carried in financial statements at cost.

(d) Derecognition of financial assets:

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial

assets) is primarily derecognized when:-

i) The rights to receive cash flows from the asset have expired, or

ii) The Company has transferred its contractual rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the statement of profit and loss if such gain or loss would have otherwise been recognised in the statement of profit and loss on disposal of that financial asset.

II) Financial Liability -

(a) The Company’s financial liability comprise:

i) Non-current financial liabilities mainly consist of borrowings.

ii) Current financial liabilities mainly consist of trade payables, staff related and other payables.

(b) Subsequent measurement of financial liabilities:

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent reporting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest rate method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs’ line item.

(c) Derecognition of financial liabilities:

A financial liability is derecognised when the obligation under the liability is discharged or 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 the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

III) Offsetting of financial instruments - Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

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Mar 31, 2015

A) Financial Statements have been prepared at historical cost and in accordance with the generally accepted accounting principle son Going Concern basis.

b) WIP & Consumables are stated at cost and Raw Material and Finished Goods are valued at cost or market value whichever is lower as per AS- 2. Finished Goods and Process stock include cost of conversion and other cost incurred in bringing the inventories to their present location and condition after considering the credit of VAT and Canvas.

c) Cash Flow Statement is prepared by the "Indirect method" set out in AS 3 on "Cash Flow Statement" and presents the cash flow by operating, investing and financing activities of the company. Cash and Cash equivalents presented in Cash Flow Statement consist of Cash on Hand and demand deposits with banks.

d) Payment related to earlier years booked as expenses in the current year are classified as "Prior Period Item" as per AS- S, as these are clearly distinct from ordinary activities of the company. Further, Accounting policies have been changed in respect of Depreciation on Fixed Assets. The Changes has been made in the estimated useful life of the assets. The revised estimation of useful life of the assets has-been taken on the basis useful life of the assets as prescribed under Schedule II to the Companies Act 2013.

e) Fixed Assets are stated at cost less depreciation charged on "Straight Line Method" in accordance with the schedule HtoCompaniesAct2013.

f) Depreciation on fixed assets has been charged on "Straight Line Method" on Pro-rata basis and has been realigned in accordance with schedule II to the Companies Act, 2013. Life span of all the assets have been recalculate and taken as per schedule II. Carrying value of assets is now depreciated over its remaining useful life. Residual value of the assets has been taken as nil in case of all assets which is also with the provisions of Schedule II. The assets of which residual life remains nil as on 01.04.2014, the book value of these assets has been transferred to retained earnings, which isa deviation from AS 6.

g) All expenses and income are accounted for on accrual basis and accordingly company follows the Mercantile System of Accounting except stated otherwise as per AS 9. Claims / refunds not ascertainable with reasonable certainty are accounted for on settlement basis.

h) No Transactions in foreign currency done during the year. Previous year there was Income arise on account of foreign exchange fluctuation of Rs. 39,048/- which was booked as income as per AS 11, issued by ICAI.

i) As per AS-15, Employee Benefits, provisions of employee benefits are to be done on accrual basis, but in the absence of actuarial valuation it is not possible to quantify the amount payable on account of Gratuity and Leave Encashment benefits and are to be accounted for on cash basis. Its effect on Pro fit and Loss of the company is not determined.

j) Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of funds for acquisition of qualifying asset. A qualifying asset is an asset that necessarily takes a "substantial period of time" to get ready for its intended use or sale. The company has not acquired any "qualifying asset" during the financial year as per AS-16, Borrowing Cost issued by ICAI.

k) The company does not have separate segment that are subject to separate risk and returns. Hence, the provisions of clause 41 of listing agreement and AS-17 issued by ICAI with regard to segmental reporting are not applicable to the company.

l) Transactions entered by the company with the related parties, has been disclosed by way of notes as defined under AS -18 issued by ICAI.

m) Basic earnings per share is calculated by dividing Net profit after tax for the year attributable to Equity Shareholders of the company by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is calculated by dividing Net profit after tax for the year attributable to Equity Shareholders of the company (after adjustment of diluted earnings) by the weighted average number of equity shares outstanding during the year. Basic earnings per share is Rs.(-) 2.35 per share and diluted earnings per share is Rs. (-) 2.35 per share. [Previous Year Basic EPS Rs. (-) 0.94 Per Share and Dilute deposers.(-)0.94].

n) There is no subsidiary company of the company, also the company has neither obtained any economic benefit from its activities nor did the company entered into any joint venture with any entity Hence, the provisions of AS-21,23 and 27 issued by ICAI not applicable to the company.

o) As per AS-22, "Taxes on Income", company has Deferred Tax Asset. The company has been reporting negative income during the year and also over the last few years. Considering the past trend and in the absence of reasonable certainty that sufficient future taxable income would be available against which deferred tax assets would be realized. Hence deferred tax assets has not been accounted for which is in accordance with AS-22 issued by ICAI.

p) Due to having loss in the current financial year and accumulated carried forward loss under the income tax act, no provision for current year taxation is made for the year.

q) During the year the company has again started its commercial production after the production activity was closed since long. The company has introduced new production line in addition of earlier one. The board is of the opinion that the company is still in the line of operation and not discontinued its line of operation as per AS 24.

r) Asset is treated as impaired when carrying cost of the assets exceeds its recoverable amount. No asset is impaired during the year. Also inventory and other assets have realizable value at which it is stated in the books of accounts; hence no impairment loss needs to be booked as per AS-28, issued by ICAI.

s) Contingent liabilities are not provided for but disclosed, if any by way of notes on account and will be accounted for in the year of occurrence as per AS 29.

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Mar 31, 2014

Attached to and forming part of the financial statement As at 31st March 2014

1. Financial Statements have been prepared at historical cost and in accordance with the generally accepted accounting principles on Going Concern basis.

2. WIP & Consumables are stated at cost and Raw Material and Finished Goods are valued at cost or market value whichever is lower as per AS-2

3. Property tax and Stock Exchange Fee of earlier years have been paid during the year under audit and hence the amount is treated as "Prior Period Item' as per AS-5, as this is clearly distinct from ordinary activities of the company.

4. Fixed Assets are stated at cost less depreciation charged on S.L M. basrs at the rates and in the manner prescribed and specified in schedule X!V to the Companies Act. 1956 as perAS-6.

5. As per the requirement of Companies (Amendment) Act, 1988 all expenses and income are accounted for on accrual basis and accordingly Company follows the Mercantile System of Accounting except stated otherwise as per AS 9,

6. Income arises on account of foreign exchange fluctuation towards payment in foreign currency to M/s Health Machinery Company Ltd. as advance against machine purchase. Later on on cancellation of the order, the amount was received back in foreign currency and income is booked of Rs, 39048/- against foreign exchange fluctuation. The difference in the transaction value is booked as income as per AS 11 issued by ICAI.

7. As per AS-15, Employee Benefits, provisions of employee benefits are to be done on accrual basis, but in the absence of actuarial valuation it is not possible to quantify the amount payable on account of Gratuity and Leave Encashment benefits and are to be accounted for on cash basis. Its effect on Profit and Loss of the company is not determined.

8. The company has not acquired any qualifying assets during the financial year as per AS-16, Borrowing Cost issued by ICAI.

9. The company does not have separate segment that are subject to separate risk and returns. Hence, the provisions of clause 41 of listing agreement and AS-17 issued by ICAI with regard to segmental reporting are not applicable to the company

10 No transactions have been entered by the company with the related parties, as defined under AS -18 issued by ICAI, during the year under audit.

11. Asper AS 20, Earnings per share comes to Rs.(-) 0.94 per share and diluted EPS is Rs. (-) 0.94 per share, [Previous Year Rs. (-) 0.83 Per Share].

12. There is no subsidiary company of the company, also the company has neither obtained any economic benefit from its activities nor did the company entered into any joint venture with any entity. Hence, the provisions of AS-21,23 and 27 issued by ICAI not applicable to the company

13. As per AS-22, "Taxes on Income company has Deferred Tax Asset. The company has been reporting negative income during the year and also over the last few years, Considering the past trend and in the absence of reasonable certainty that sufficient future taxable income would be available against which deferred tax assets would be realized. Hence deferred tax assets has not been accounted for which is in accordance with AS-22 issued by ICAI.

14. Due to having loss in the current financial year and accumulated carried forward loss under the income tax act, no provision for current year taxation is made for the year.

15. During the year under audit, the company has not done any commercial production nor done any related activities. However, as per the explanations of board, the company is still in the line of operation and not discontinued its line of operation as per AS 24.

16. During the year under audit, on the basis of explanation and information given to us, inventory and other assets have realizable value at which it is stated in the books of accounts. Hence no impairment loss needs to be booked as perAS-28, issued by ICAI.

17. Contingent liabilities are not provided for but disclosed, if any by way of notes on account and will be accounted for in the year of occurrence as per AS 29.

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Mar 31, 2012

1. Financial Statements have been prepared at historical cost and in accordance with the generally accepted accounting principles on Going Concern basis.

2. WIP & Consumables are stated at cost and Raw Material and Finished Goods are valued at cost or market value whichever is lower as per AS- 2.

3. Fixed Assets are stated at cost less depreciation charged on S.L.M. basis at the rates and in the manner prescribed and specified in schedule XIV to the Companies Act, 1956 as per AS-6.

4. As per the requirement of Companies (Amendment) Act, 1988 all expenses and income are accounted for on accrual basis and accordingly Company follows the Mercantile System of Accounting except stated otherwise as per AS – 9.

5. No Transaction in Foreign Exchange has entered into by the company during the year. Hence, there arises no difference in transaction values as per AS – 11, issued by ICAI.

6. As per AS-15, Employee Benefits, provisions of employee benefits are to be done on accrual basis, but in the absence of actuarial valuation it is not possible to quantify the amount payable on account of Gratuity and Leave Encashment benefits and are to be accounted for on cash basis. Its effect on Profit and Loss of the company is not determined.

7. The company has not acquired any qualifying assets during the financial year as per AS-16, Borrowing Cost issued by ICAI.

8. The company does not have separate segment that are subject to separate risk and returns. Hence, the provisions of clause 41 of listing agreement and AS-17 issued by ICAI with regard to segmental reporting are not applicable to the company.

9. As per AS – 20, Earnings per share comes to Rs. (-) 3.78 per share and diluted EPS is Rs. (-) 3.78 per share. [Previous Year Rs. (-) 0.88 Per Share].

10. There is no subsidiary company of the company, also the company has neither obtained any economic benefit from its activities nor did the company entered into any joint venture with any entity. Hence, the provisions of AS-21, 23 and 27 issued by ICAI not applicable to the company.

11. As per AS-22, "Taxes on Income" company has Deferred Tax Asset. The company has been reporting negative income during the year and also over the last few years. Considering the past trend and in the absence of reasonable certainty that sufficient future taxable income would be available against which deferred tax assets would be realized. Hence deferred tax assets has not been accounted for which is in accordance with AS-22 issued by ICAI.

12. Due to having loss in the current financial year and accumulated carried forward loss under the income tax act, no provision for current year taxation is made for the year.

13. Major part of obsolete inventory disposed off during the year by the company but as per the explanations of board, the company is still in the line of operation and not discontinued its line of operation as per AS – 24.

14. Obsolete / unusable Inventory of the company has been disposed off at its market value and the residual inventory has value at which it is stated in the books of accounts. Loss on account of impairment is booked on disposing off of obsolete inventory in the profit and loss account and no further impairment loss need to be booked as per AS-28, issued by ICAI.

15. Contingent liabilities are not provided for but disclosed, if any by way of notes on account and will be accounted for in the year of occurrence as per.