kn murthy & co chartered accountants - vivimed …...kn murthy & co chartered accountants...

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KN Murthy & CoChartered Accountants

A-418, Majestic Mansion, Shyamlal Buildings, Begumpet, Hyderabad-500016Phone: 040-27761185, Email: [email protected]

AUDITORS' REPORT

TO THE MEMBERS OFOCTTANTIS NOBEL LABS PRIVATE UMITED

1. We have audited the attached Balance Sheet of Octtantis Nobel Labs Private Limited as at March31, 2012 and also the Profit and Loss Account for the year ended as on that date, annexedthereto. These financial statements are the responsibility of the Company's management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes, examining on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government ofIndia in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the 'Act') and on thebasis of such checks as we considered appropriate and according to the information andexplanations given to us, we set out in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to our comments in Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purposes of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so faras appears from our examination of those books;

c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreementwith the books of account;

d) In our opinion, the Balance Sheet and the Profit and Loss Account dealt with by this reportcomply with the applicable accounting standards referred to in sub-section (3C) of Section 211of the Act;

e) On the basis of written representations received from the Directors as on March 31, 2012 andtaken on record by the Board of Directors, we report that none of the directors aredisqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us,the said accounts together with notes thereto and Statement of Significant Accounting Policiesgive in the prescribed manner the information required by the Companies Act 1956, and alsogive, a true and fair view in conformity with the accounting principles generally accepted inIndia;

a) In case of the Balance Sheet, of the state of affairs of the company as at 31st March,2012

b) In case of the Profit and Loss Account, the profit for the year ended on that date.

For and on behalf ofKN Murthy & CoChartered AccountaJ'sFirm No. 0068235 /,r---KSVL Narasimha MurthyProprietorMembership No 203849

Place HyderabadDate

...- ----------------~-~--------- ----------"'!"'"--------

Annexure to the Auditors' Report to the Members ofOcttantis Nobel Labs Private Limited

(Annexure referred to in Paragraph 3 of the Report of the Auditors to the Members ofOcttantis Nobel Labs Private Limited for the year ended March 31, 2012)

Fixed Assets

1. The Company has maintained proper records to show full particulars including quantitative detailsand situation of its fixed assets.

2. The fixed assets of the company have been physically verified during the year by the managementand it was reported that no discrepancies have been revealed on such verification.

3. None of the fixed assets of the company have been disposed off during the year.

Inventories

4. The inventory has been physically verified during the year by the management. In our opinion, thefrequency of verification is reasonable.

5. The procedures of physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the company and nature of its business.

6. The company has maintained proper records of its inventories. The discrepancies noticed onverification between physical stocks and the book records were not material.

Loans given by the Company

7. The Company has not granted any loans, secured or unsecured, to companies, firms or other partieslisted in the register maintained under section 301 of the Companies Act, 1956.

Loans taken by the Company

8. The Company has taken loans, secured er unsecured from companies, firms or other parties listed inthe registered maintained under section 301 of the Companies Act, 1956 amounting to Rs.6,20,94,914 (Vivimed Labs Ltd - Pharma Division Rs. 40,00,056 Debit and Vivimed labs Ltd., -Speciality Chemicals Rs. 6,60,94,970 Credit).

Internal Control Systems

9. In our opinion and according to the information and explanations given to us, there are adequateinternal control procedures commensurate with the size of the company and the nature of itsbusiness.

Transactions with related parties as per Register of Contract u/s 301

10. In our opinion and according to the information and explanations given to us, the company has notmade any transactions with parties for purchase of goods and materials and sale of goods, materialsand services made in pursuance of contracts or managements entered in the Register maintainedunder section 301 of the Companies Act, 1956 and aggregating during the year to Rs 5,00,000 ormore in respect of each party.

Deposits from the public

11. The Company has not accepted any deposits from the public.

Internal Audit System

12. In our opinion, the Company has an internal audit system commensurate with the size, of thecompany and nature of its business.

Cost Records

13. To the best of our knowledge and according to the information and explanations given to us, theCentral Government has not prescribed maintenance of cost records under section 209(1) (d) of theCompanies Act, 1956 for the products of the Company.

Statutory Dues

14. The Company has generally been regular in depositing, during the year, Provident Fund dues with theappropriate authorities in India. However delays in few cases have been noticed in remittance of PFdues.

Undisputed Statutory Dues

15. Based on the information and explanations given to us, as at 31st March, 2012, no amounts areoutstanding in respect of undisputed Income Tax and other statutory dues which were due for morethan six months from the date they became payable.

Disputed Statutory Dues

16. As informed to us, there are no disputed statutory dues as on the date of the Balance Sheet.

Sick Industry

17. The company has no accumulated losses and not incurred any cash losses during the financial yearcovered by audit or in the immediately preceding financial year. This is the first year of operations.

Dues to financial institutions

18. During the year, we have noticed no delays in repayments of Term Loans with Banks.

19. In our opinion and according to the information and explanations given to us, the loans have beenapplied for the purposes for which they were raised.

Secured Loans and advances granted

20. In our opinion and according the information and explanations given to us, no loans and advanceshave been granted by the company on the basis of security by way of pledge of shares, debenturesand other securities.

Chit Fund, Nidhi or Mutual Benefit Company

21. This clause is not applicable to the company.

Investment Company


Guarantees given by company

23. As informed to us, the company has not given any guarantees for loans taken by others.

Term Loans

24. Please refer clause 18 above.

Source of Funds and its application


Preferential Issue

26. The company has not made any preferential allotment of shares to the parties and the companiescovered in the register maintained under section 301 of the Companies Act, 1956 during the year.

Securities and debentures


End use of Public Issue Funds


Frauds

29. To the best of our information and explanations given by the company and to the extent ofverification of books of accounts, no frauds have been committed on / by the company during theyear.

30. Other Clauses of the Order are not applicable to the company.

for and on behalf of

KN MurthyChartered Accountants

firm No. 0068235 ~ ~ ~

KSVL Narasimha Murthy ~Proprietor

Membership No 203849

Place HyderabadDate ..

OCTf ANTIS NOBEL LABS PVT LTD.,

Profit and Loss statement for the year ended 31st March, 2012

Particulars Note NoYear Ending 31-03-2012 Year Ending 31-03-2011

Rs. Rs.

I. Revenue from operations 19 3,32,93,392II. Other Income 20 2,45,372

HI. Total.Revenue (1+II) 3,35,38,764 -IV. Expenses:Cost of materials consumed 2,70,14,324Purchase of Stock-in- Trade -Changes in inventories of Finished goods, WIP and Stock-in- Trade (94,61,484)Employee benefit expense 21 2,27,96,343Financial costs 22 12,04,842Depreciation and amortization expense 1,93,578Other expenses 23 76,72,769

Total Expenses 4,94,20,371 -

V. Profit before exceptional and extraordinary items and tax (Ill - IV)(1,58,81,607) -

VI. Exceptional Items - -.~

VII. Profit before extraordinary items and tax (V - VI) (1,58,81,607) -VIII. Extraordinary Items - -IX. Profit Before Tax (VII - VIII) (1,58,81,607) -X. Taxexpense:

(1) Current tax - -(2) Deferred tax - -XI. Profit(Loss) from the perid from Continuing Operations (VII - VIII) (1,58,81,607) -XII. Profit/ (Loss) from Discontinuing Operations - -XIII. Tax expense of Discounting Operations - -XIV. Profit! (Loss) from Discontinuing operations (XII - XIII) - -XV. Profit/ (Loss) for the period (XI + XIV) (1,58,81,607) -XVI. Earning per equity share:

(1) Basic

(2) Diluted

AS PER OUR REPORT OF EVEN DATE

For K N Murthy & eo,Chartered AccountantsFirm No. 0068235L

For OCTT ANTIS NOBEL L

~ ;W Mm!J>.;z. le <;.V L f\J ~...,...,,:vjV\--, '" <Partner

M.No. 203849

Place: HyderabadDate:

"-.

OcrrANTIS NOBEL LABS PVT LTD.,

Balance Sheet as at 31st March, 2012

Particulars Note NoAs on 31-03-2012 As on 31-03-2011

Rs. Rs.

I. EQUITY AND LIABILITIES

(1) Shareholder's Funds(a) Share Capital 1 2,30,00,000(b) Reserves and Surplus 2 (1,58,81,607)(c) Money received against share warrants -

(2) Share application money pending allotment

(3) Non-Current Liabilities(a) Long-term borrowings 3 9,30,40,611(b) Defferred tax liabilities (Net) -(c) Other Long term liabilities -(d) Long term provisions 4 - -

(4) Current Liabilities(a) Short-term borrowings 5 -(b) Trade payables 80,89,582(c) Other current liabilities 6 -(d) Short-term provisions 7 61,46,286

Total 11,43,94,872 -II.Assets(1) Non-current assets ,(a) Fixed assets

(i) Tangible assets 8 62,00,132(ii) Intangible assets 9 2,14,254·(ill) Capital work-in-progress 2,60,000(iv) Intangible assets under development -

(b) Non-current investments 10 -(c) Defferred tax assets (net) -(d) Long term loans and advances 11 -(e) Other non-current assets 12 26,67,605

(f) Long term deposits -

(2) Current assets(a) Current investments 13 -(b) Inventories 14 94,61,484

(c) Trade receivables 15 1,97,18,051

(d) Cash and Bank Balances 16 1,47,954

(e) Other bank balances -(e) Short-term loans and advances 17 7,57,25,391

(f) Other current assets 18 -Total 11,43,94,871 -


Place: HyderabadDate:

For K N Murthy & Co.,Chartered Acc~tantsFirm No. 006~

Kl'lMHftl:ly,.Partner

M.No. 203849

, ,

OCTT ANTIS NOBEL LABS PVT LTD.,

NOTES TO BALANCE SHEET

NOTE NO. 1 : SHARE CAPITAL

.s.No. Particulars No. of As on 31-03-2012 No. of As on 31-03-2011Shares Rs. Shares Rs,

a Share Capital (For each class of share capital)(a) Authorised 50,00,000 -(b) Issued 50,00,000 -(c) Subscribed & Fully Paid Up 2,50,000 -(d) Subscribed & not fully paid up 2,27,50,000 -(e) Par Value per share Rs.

Total Equity Share capital 2,30,00,000 -b Calls unpaid:

By Directors - -By Officers - -

c Forfeited Sahres (amount originally paid up) - -d A Reconcilation of the number of shares outstanding

at the beginning and at the end of the reporting period

Total no of shares at opening accounting period - -Add/Less: No of shares issues/ Forfeited During the year - -Total no of shares at end of accounting period - -

e Preference Shares at the beginning as per class of shares - -Add/Less, : Issued/Repaid During the year - -

Preference shares at the end of the Year - -Total Share capital (Equity and Preference) 2,30,00,000 -

Notes:

f Details of Shares in respect of each class in the company held by its holdingcompany or by subsidiaries or associates of the holding company or theultimate holding company in aggregate

g Shares in the company held by each share holder holding more than '5 % sharesspecifying the number of shares held

h Share Reserved for issue under options and contracts/ commoitments for thesale of shares/ disinvestments, including the terms and amounts

i for the period of 5 years immediately preceeding the date as at which thebalance sheet is prepared:(a) Aggregate number and class of shares alloted as fully paid up pursuantsto contract(s) without payment being recived in cash,(b) Aggregate numbure and class of shares alloted as fully by way of bonus

shares( c) Aggregate number and class of shares bought back.

j Terms of any securities convertible into equity/preference shares issued alongwith the earlist date of conversion in decending order starting from the farthestsuch date.

r>; ,

- ~ ~~RTH~

OCIT ANTIS NOBEL LABS PVT LTD.,

NOTES TO BALANCE SHEET

NOTE NO. 2 : RESERVES AND SURPLUS

S.No. Particulars As on 31-03-2012 As on 31-03-2011

Rs. Rs.

I RESERVES AND SURPLUSa) Capital reserve - -b) Capital Redemption reserve - -c) Securities premium reserve - -d) Debenture redemtion reserve - -e) Revaluation reserve - -f) Share options outstanding account - -g) Other Reserves - -h) SurpuIs:

i) Profit and loss account (1,58,81,607) -ii) Dividend - -iii) Bonus shares - -iv) Transfer to/from reservs, -- -

II A Reserve specifically represented by earmarked investments - -III Negetive balance of reservs and surplus account - -

Total Reserves and Surplus (1,58,81,607) -

OCIT ANTIS NOBELLABSPVT LTD.,

NOTE NO. 3 : LONG TERM BORROWINGS


Rs. Rs.

I Long Term borringsa) Bonds/debentures - -b) Term loans/CC Limits

- From banks 2,99,45,697 -- from other parties - -

c) Deffered payment laibiliteies - -d) Deposits - -e) Loans and advances from related parties (Holding Company) 6,30,94,914 -

.f) loang term maturities of finance lease obligations - ~ -g) other loans and advances - -

Total Long Term Borrowings 9,30,40,611 -

NOTE NO. 4 : LONG TERM PROVISIONS

S.No. ParticularsAs on 31/03/2012 As on 31/03/2011

Rs. Rs.I a) Provision for emplyoee benefit. - -

b) Others ( specify the nature) - -

Total Long Term Provisions - -NOTE NO. 5 : SHORT TERM BORROWINGS.

Short term borrowingsa) Loans repayable on demand:

- from banks- from other parties

b) Loans and advances from other partiesc) Loans and advances from Related partiesd) Deposits.f) Other loans and advances

Rs.As on 31-03-2012 As on 31-03-2011

ParticularsS.No.Rs.

Total Short Term Borrowings

OCTIANTIS NOBEL LABS PVT LTD.,

NOTE NO. 6 : OTHER CURRENT LIABILITES

S.No. ParticularsAs on 31-03-2012 As on 31-03-2011

Rs. Rs.I a) Current maturities of long term debt - -

b) Current maturities of finance lease obligation - -c) interest accured but not due on borrowings - -d) Interest accured and due on borrowings. - -e) Income received in advance. - -f) Unpaid dividend. - -g) Application money due for refund and interest on the same. - -h) Unpaid matured deposits and interest accured thereon. - ,- -i) Unpaid matured debentures and interest accured thereon. - -j) OtherPayables (Specify the nature.) . - -

Total Other Current Liabilites - -

NOTE NO. 7 : SHORT TERM PROVISIONS

19,32,207

Rs.ParticularsS.No. As on 31-03-2012 As on 31-03-2011

Rs.

a) Provisions for employee benefitsb) Others

TDSpayableOutstanding Liabilities (Brake up given in sheet no. 1)Other Liabilities (Brake up given in sheet no. 1)

1,73,76636,42,3113,98,002

Total ~hort Term Provisions 61,46,286

OCIT ANTIS NOBEL LABS PVT LTD.,

NOTEN08 &9: TANGIBLE & INTANGIBLE ASSETS AS AT 31-03-2012

Gross Block

SI. No. Particulars

Drpt'PCia:tion,lAmortintion

Sale /Deletionsdurin~ the year

As on31..03.2012

Dep.As en01.04.2Ol1

Net Block as on31..03.2012

Net Block as on31.03.2Ol1

1

2

3

4

5

6

7

8

9

LAND

BUIl.D1NG

PLANT .le MACHINERY

ELECl1UCAL EQUIPMENT

LABORATORY EQUIPMENT

OFFICE EQUIPMENT

COMPUTERS

FURNI11JRE

VEHICLES

AdditionsAdditions

As on 01.04.2011 during the yeu througb Businessacquitions

60,62,473 60,62,473

2,77,673 2,77,673

63,4.0,146 63,4.0,146

2,67,818 2,67,818

2,67,818 2,67,818

2,60,000 2,60,000

2,6.0,000 2,60,000

68,67,964 68,67,964

Dep. For the year Impairment Loss! Total201.1·2012 Reversal Depreciation

1,17,291 1,17,291

22,m 22,m

1,4.0,014 1,4.0,014

53.564 53,564

53,564 53,564

1,93,578 1,93,578

59,45.182

2,54,950

62,00,132

2,14,254

2,14,254

2,60,000

2,60,000

66,74,386

1.0 INTANGmE FIXED ASSETS

BRANDS/TRADE MARKS

GOODWILL

PATENTS/COPY RIGHTS

11 CAPITAL WORK IN PROGRESS

TOTAL

. PREVIOUS YEAR

OCTTANTIS NOB EL LABS PVT LTD.,

NOTE NO. 10 : NON- CURRENT INVESTMENTS

As on 31-03-2012 As on 31-03-2011S.No. Particulars

Rs. Rs.I Non- Current Assets

1) Trade Investments - -2) Other Investments :

a) Investment Property - -b) Investment in Equity Instrument - -c) Investment in preference shares - -d) Investment in Government or trust securities - -e) Investments in debentures or bonds - -of)Inveatment in Mutual funds - -

"

g) Investment in partnership firm 0 - -h) Other non- current Investments 0 - -

Total Non - Current Assets - -

NOTE NO. 11 : LONG- TERM LOANS AND ADVANCES

As on 31-03-2012 As on 31-03-2011S.No. Particulars

Rs. Rs.

I Long - term Loans and Advances:a) Capital advance - -b) Security Deposit - -c) Loans and advances to related parties - -d) Other loans And advances (against supplies) - -

Total Long - Term Loans and Advances 0 0

NOTE NO. 12 : OTHER NON - CURRENT ASSETS

As on 31-03-2012 As on 31-03-2011

Long term Trade Receiva esOthers (Advance given to Octtans Nutra) 26,67,605

Rs.S.No. Particulars

Rs.

III

Total Other Non - Current Assets 26,67,605

"

OCTTANTIS NOBEL LABS PVT LTD.,

NOTE NO. 13 : CURRENT INVESTMENTS

S.No. Particulars As on 31-03-2012 As on 31-03-2011Rs. Rs.

I Current investments :a) Investment in euity instruments - -b) investment in prefence shares - -c) investment in government ot trust sesurities - -d) Investment in debentures/ bonds - -e) Investment in mutual funds - -f) Investment in partnership firm - -g) Other investments r'- -

Total Current Investments - -NOTE NO. 14: INVENTORIES


Rs. Rs.I Inventories : ~

a) Raw materials - -b) Work - in - progress - -c) finished goods (break-up given in sheet no. 1) 92,17,741 -d) stock - in - trade ( in respect of goods acquired for trading) - -e) stores and spares - -f) Loose tools - -g) Others - Goods in Transit 2,43,743 -

Total Inventories 94,61,484 -

NOTE NO. 15 : TRADE RECEIVABLES


Rs. Rs.I a) Outstanding more than 6 months - -

b)Outstanding less than 6 months 1,97,18,051 -

Total Trade Receivables 1,97,18,051 -

OCTTANTlS NOBEL LABS PVT LTD.,.

NOTE NO. 16 : CASH AND CASH EQUIVALENTS


I Cash and cash eqivalents :a) Balances with banks:

1) Unpaid Dividend - -2) Margin Money - -3) Bank deposits with more than 12 months maturity - -

b) Cheques, draft on hand - -c) Cash on hand 760 -d) Others - Bank Balances 1,47,194 -

Total Cash and Cash Equivalents 1,47,954 -NOTE NO. 17: SHORT TERM LOANS AND ADVANCES


Rs. Rs.

I a) Loans and advances to related parties - -b) others - -

Advance given Hezen Inc 2,75,83,014Advance given Hezen Inc (against supplies) 4,70,00,000CRM advance given 7,61,806Deposit with Sales Tax 25,000Deposit for Depot at Haridwar 50,000Employee Advance 92,772Prepaid Expenses 12,799Packing Material Deposit with Zaneka Health Care 2,00,000

Total Short Term Loans and Advances 7,57,25,391 -NOTE NO. 18 : OTHER CURRENT ASSETS


I Current assets that do not fit into any other assets categories - -II Interest accured on investments - -III Export incentive Receivable - -

Total Other Aurrent Assets - --

OCIT ANTIS NOB EL LABS PVTLTD.,

NOTES TO STATEMENT OF PROFIT & LOSS

NOTE NO. 19: REVENUE FROM OPERATIONS

S.No. Particulars Year Ended 31-03-2012 Year Ended 31-03-2011Rs. Rs.

(i) Revenue from operations in respect of non-finance company(a) Sale of Products 3,32,93,392 -(b) Sale of Services - -(c) Other Operating Revenues - -Less: Excise Duties - -

3,32,93,392 -(ii) Revenue from operations in respect to Finance company

(a) Interest - -(b) Other Financial Services - -

- -Notes:

Total Revenue from Operations 3,32,93,392r: -

NOTE NO. 20 : OTHER INCOME

\


I (a)Interest income (Other than a finance company) - -(b)(i) Dividend from subsidery companies - -

(ii) Dividend Income - -(c) Net Gain/Loss on sale of Investments - -(d)Other non-operating income(net of expenses directly attributed to suchincome) 2,45,372 -(e) Adjustments to the carrying value of investments (Write-back) - -(f) Net gain/loss on foreign currency translation and transaction(other than considered as finance cost) - -

Total Other Income 2,45,372 -NOTE NO. 21 : EMLOYEE BENEFIT EXPENSES

Year Ended 31-03-2012 Year Ended 31-03-2011S.No. Particulars

Rs.Rs.I (a) Salaries & Wages 2,08,64,136 -

(b) Contribution to Provident & Other Funds 19,32,207 -(c) Expenses on employee stock option scheme (ESOP)and Employee StockPurchase Plan(FSPP) - -(d) Staff Welfare Expenses - -Notes:

Total Employee Benefit Expenses 2,27,96,343 -

NOTI£'NO. 22 : FINANCE COST


I (a) Interest Expenses 12,04,842 -(b) Other Borrowing costs - -(c) Applicable net gain/loss on foreign currency translations & transactions -

Total Finance Cost 12,04,842 -

NOTE NO. 23 : OTHER EXPENSES

S.No.

Notes:

Particulars Year Ended 31-03-2012 Year Ended 31-03-2011Rs.

(a) Consumption of Stores & Spares(b) Power & Fuel(c) Rent(d) Repairs to Building(e) Repairs to Machinery(f) Insurance(g) Rates & Taxes (excluding Income Tax)(h)Miscellaneous Expenditure(i) Security0) Business Development Expenditure(k) Commission paid to Consignee Agents & Taxes(I) Discount(m) Freight Outward(n) Travelling Expenses(0) Printing and Stationery(P) Bank charges(q) Telephones, Internet & Courier charges® Professional Charges(s) VAT Disallowed(t) Rates and Taxes(u) Payment to Auditors:

(i) As Auditor(ii) For Taxation Matters(Hi)For Company Law Matters(iv) For Management Services(v) For Other Services(vi) For Reimbursement of expenses

(v) Bank processing charges .(w) Adjustment to the carrying amount investments(x) Net loss on sale of Invesments(y) Prior Peiod Items

36,3589,27,240

1,37,87892,300

4,66,63464,526

18,72,0607,87,5634,66,2208,88,5447,55,730.1,29,898

28,2142,11,703

42,0004,25,051

11,000

3,29,850

(o)(i) The aggregate, if material, of any amounts set aside ,to provisions madeto meet any specific liabality,contingency or commitment knowm to exist atthe date as to which the balance sheet is made up

(ii) The aggregate, if material of any amounts withdrawn from suchreserves.

Rs.

OCTTANTIS NOBEL LABS PVT LTD.,

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2012

A. Cash flow from operating activities:

Net Loss before Tax and extrodinary Items (158.82)

Adjustements for:

Depreciation 1.94Interest paid 12.05

Insurance Claim Received (2.45)

11.54

Operating profit before working capital - (147.28)

Charges

Increase in Sundry Debtors (197.18)

Decrease!lncrease in Inventories (94.61)

Incease ! Decrease in liabilities 142.34

Decrease!lncrease in loans & Advances (783.92)

(933.37)

Cash generated from Opeations (1,080.65)

Cash flow before extra-ordinary activities -Direct taxes paid - -Net cash from Operating Activities (1,080.65)

B Cash flow from Investing Activities:

Sale!purcahse of Fixed Assets (66.08)

Sale of fixed assets -Decreaseflncrease in Capital Work-In-progress (2.60)

Sale! Purcahse of investments - of asset

Net Cash flow from Investing Activities: (68.68)

C Cash flow from Financing Activities:

Borrowing /Repayment of secured loans 299.46

Borrowing/Repayment of un-secured loans 630.95

Share Capital 230.00

Interest paid (12.05)

Insurance Claim Received 2.45

Net Cash flow from Financing Activities: 1,150.81

Net Increase (decrease) in cash/cash equivalent 1.48

D Cash and cash equivalents:

Opening Balance -

Closing Balance 1.48


For K N Murthy & Co.,

Chartered Accountants

Finn No. 0068235 ~

L ~~)-For OCTTANTIS NOBEl LABS PVT LTD.,

Director

6r'~Director

(Mr. Ramesh Challa)

Place: Hyderabad

Date;/

/

"*]lol MlJrtRJ'Partner

M.No. 203849

SIGNIFICANT ACCOUNTING POLICIES.

BASISOF PREPARATION:

The financial statements have been prepared to comply in all material respects with theaccounting standards notified by Companies Accounting Standards Rules, 2006and the relevantprovisions of the Companies Act, 1956 ('the Act'). The financial statements have been preparedunder historical cost convention on an accrual basis in accordance with accounting principlesgenerally accepted in India. The accounting policies have been consistently applied by theCompany and are consistent with those used in the previous year.

USEOF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accountingprinciples require the management to make estimates and assumptions that affect the reportedamounts of Assets and Liabilities and disclosure of Contingent Liabilities at the date of thefinancial statements and the result of operations during the reporting period. Although theseestimates are based upon management's best knowledge of current events and actions, actualresults could differ from these estimates. Significant estimates used by the management in thepreparation of these financial statements include estimates of the economic useful life of FixedAssets and provisions for bad and doubtful debts. Any revision to accounting estimates isrecognized prospectively.

(a) Accounting Convention and Revenue Recognition:

The Financial Statements have been prepared on a going concern basis in accordance withhistorical cost convention except for such fixed assets which are revalued. Both Incomeand Expenditure are recognized on accrual basis.

Sales are accounted Net of ExciseDuty, Taxes and Sales Returns. Other Items of Revenueare recognized in accordancewith AS-9.

(b) Cash Flow Statement: AS-3

The Company has prepared Cash Flow Statement as per AS-3.

(c) Retirements Benefits:

Staff benefits arising out of retirements / death, comprising of contributions to ProvidentFund, Superannuation & Gratuity Schemes, accrued Leave Encashment and other post-separation benefits are accounted ,in accordancewith AS-1S.

(d) Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements thereto,inclusive of taxes, freight and other incidental expenses related to acquisition,

improvements and installation, except in case of revaluation of Fixed Assets where theyare stated at revalued amount, as contained in AS-lO. Capital Work-in-Progress includescost of Fixed Assets under installation, any unallocated expenditure and Interest duringconstruction period on loans taken to finance the Fixed Assets.

(e) Depreciation:

Depreciation on Fixed Assets is provided on Written down method as per the ratesspecified in Schedule XIV of the Companies Act, 1956. This is in accordance with the AS-6and there is no change in the method of Depreciation during the year.

(f) Accounting for Government Grants:

Government Grants / Subsidies are accounted in accordance with AS-12.

(g) Investments:

Long term investments are stated at cost. However, provision for diminution is made torecognise any decline, other than temporary, in the value of long term investments.Current Investments are stated at the lower of cost and fair value.

(h) (a) Intangible Assets:

Intangible assets are capitalized at cost if:

• It is probable that the future economic benefits that are attributable to theasset will flow to the company;

• The company will have control over the assets;

• The cost of these assets can be measured reliably and is more thanRs. 10,000/-&

• This is in accordance with AS-26.

(b) Expenditure on Research and Development:

Capital Expenditure on Research and Development has been capitalized as Fixed Assets atthe cost of acquisition inclusive of taxes, freight, and other incidental expenses related toacquisition and installation.

Revenue Expenditure on research including the expenditure during the research phase ofResearch and Development projects is charged to Profit and Loss Account as expense inthe year of occurrence.

The above accounting is in compliance with AS-26.

(i) . Inventories:

Traded goods are valued at Purchase cost.

(j) Taxes on Income:

a) Provision for tax for the year comprises current Income Tax and Deferred Tax and isprovided as per the Income Tax Act, 1961.

b) Deferred tax resulting from timing differences between the book and the tax profits isaccounted for, at the current rate of tax, to the extent that the timing differences areexpected to crystallize. Deferred tax assets are recognized only to the extent there isreasonable certainty that the assets can be realized in the future; however where there isunabsorbed depreciation or carried forward loss under taxation laws, deferred tax assetsare recognized only if there is a virtual certainty of realization of such assets. Deferred taxassets/ liabilities are reviewed as at each balance sheet date.

(k) Earnings per Share:

The earnings considered in ascertaining the Earning per Share comprise of Net Profit afterTax. The number of shares used in computing Basic Earnings per Share is the WeightedAverage number of shares outstanding during the year, as per AS-20.

(1) Related Party Disclosures:

The Company as required by AS-IS furnishes the details of Related Party Disclosures inSchedule 24.

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