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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-KSB

Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended March 31, 2003

Commission File No. 000-20989

UROPLASTY, INC.

(Name of Small Business Issuer in its Charter)


|                                                                                 |  |                                                
|-------------------------------------------------------------------------------- |  | -----------------------------------------------
|Minnesota, U.S.A.
(State or other jurisdiction of
incorporation or organization) |  | 41-1719250
(I.R.S. Employer
Identification No.)

2718 Summer Street NE
Minneapolis, Minnesota 55413-2820
(Address of principal executive offices)

(612) 378-1180
(Issuers telephone number, including area code)

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.01 par value (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES [X]                  NO [   ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of Companys knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

Issuers revenues for its most recent fiscal year: $5,343,656

The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was
sold or the average bid and asked prices of such stock as of May 9, 2003 was $9,067,358.

The number of shares outstanding of the issuers only class of common stock on May 9, 2003 was 4,523,971.

Documents Incorporated By Reference: Portions of the Companys Proxy Statement for its 2003 Annual Meeting of Shareholders (the
Proxy Statement), are incorporated by reference in Part III.

Transitional Small Business Disclosure Format:

YES [   ]               NO [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES [   ]               NO [X]



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|                                                                        |                                                                                                                         |  |  |  |  |  |  | 
|----------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                 
|                                                                        | ITEM 1. DESCRIPTION OF BUSINESS                                                                                        
|                                                                        | ITEM 2. DESCRIPTION OF PROPERTY                                                                                        
|                                                                        | ITEM 3. LEGAL PROCEEDINGS                                                                                              
|                                                                        | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            
|PART II                                                                
|                                                                        | ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                       
|                                                                        | ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                      
|                                                                        | ITEM 6.a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   
|                                                                        | ITEM 7. FINANCIAL STATEMENTS                                                                                           
|                                                                        | ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                           
|PART III                                                               
|                                                                        | ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
|                                                                        | ITEM 10. EXECUTIVE COMPENSATION                                                                                        
|                                                                        | ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                
|                                                                        | ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                
|                                                                        | ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                                                              
|                                                                        | ITEM 14. CONTROLS AND PROCEDURES.                                                                                      
|SIGNATURES                                                             
|CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|EX-10.15 Employment Agreement - Marc Herregraven                       
|EX-10.16 Consulting Agreement                                          
|EX-10.17 Stock Option Agreement                                        
|EX-10.18 Consulting Agreement                                          
|EX-13.0 Financial Statements                                           
|EX-21.0 Subsidiaries of the Company                                    
|EX-99.1 Certifications by the CEO and Controller                       



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PART I

Uroplasty, Inc. (Uroplasty, or the Company) may from time to time make
written or oral forward-looking statements, including statements contained in
this filing by the Company with the Securities and Exchange Commission and in
its reports to stockholders, as well as elsewhere. Forward-looking statements
are statements such as those contained in projections, plans, objectives,
estimates, statements of future economic performance, and assumptions related
to any of the foregoing, and may be identified by the use of forward-looking
terminology, such as may, expect, anticipate, estimate, goal,
continue, or other comparable terminology. By their very nature,
forward-looking statements are subject to known and unknown risks and
uncertainties relating to the Companys future performance that may cause the
actual results, performance, or achievements of the Company, or industry
results, to differ materially from those expressed or implied in any such
forward-looking statements. Any such statement is qualified by reference to
the following cautionary statements.

The Companys business operates in highly competitive markets and is subject to
changes in general economic conditions, competition, customer and market
preferences, government regulation, the impact of tax regulation, foreign
exchange rate fluctuations, the degree of market acceptance of products, the
uncertainties of potential litigation, as well as other risks and uncertainties
detailed elsewhere herein and from time to time in the Companys Securities and
Exchange Commission filings.

Forward-looking statements may be contained in the Managements Discussion and
Analysis or Plan of Operation and other sections of this filing. Various
factors and risks (not all of which are identifiable at this time) could cause
the Companys results, performance or achievements to differ materially from
that contained in the Companys forward-looking statements, and investors are
cautioned that any forward-looking statement contained herein or elsewhere is
qualified by and subject to the warnings and cautionary statements contained
above and in the Factors Affecting the Business section of this filing.

The Company does not undertake and assumes no obligation to update any
forward-looking statement that may be made from time to time by or on behalf of
the Company.




ITEM 1. DESCRIPTION OF BUSINESS

Overview

Uroplasty is a medical device company that develops, manufactures, and markets
a family of injectable implant products used for soft-tissue augmentation for
specific indications in urology, urogynecology, colon and rectal,
otolaryngology and plastic surgery markets. The Companys products offer
physicians and their patients a minimally invasive treatment option for urinary
incontinence, vesicoureteral reflux, fecal incontinence, vocal cord
rehabilitation and dermal augmentation. Uroplastys products are CE marked in
Europe (similar to FDA approval in the United States), allowing the products to
be sold throughout the European Union, and in other major markets throughout
the world, including Canada, Australia, and many Latin American and Pacific Rim
countries. The Companys products are not sold in the United States because
submissions have not yet been made to the Food and Drug Administration (FDA)
for marketing in the United States. However, the Company is currently
conducting a multi-center clinical trial with its urethral bulking agent,
Macroplastique® Implants pursuant to an FDA Investigational Device Exemption
(IDE), as a minimally invasive, office-based procedure for treating female
stress urinary incontinence. This study is required as part of a Premarket
Approval Submission to the FDA for marketing within the United States.

MACROPLASTIQUE® Implants

The Companys key product is Macroplastique, an injectable soft tissue-bulking
agent used to treat stress urinary incontinence (SUI), the most common form
of urinary incontinence. It is designed to restore the patient to normal
urinary continence almost immediately following treatment. SUI refers to the
involuntary loss of urine as a result of activities that increase
intra-abdominal pressure, such as coughing, laughing, or exercising.
Macroplastique is also used to treat vesicoureteral reflux (VUR), a condition
occurring mostly in children in which urine flows backward from the bladder
into the kidney. Additionally, men recovered from prostate surgery who
experience incontinence are also candidates for Macroplastique treatment.

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Macroplastique is a proprietary composition of heat vulcanized, highly
textured, solid, soft, irregularly shaped polydimethylsiloxane (solid silicone)
implants suspended in a biocompatible carrier solution. The Company markets
Macroplastique through Uroplasty BV, The Netherlands, on the basis that its
out-patient minimally invasive treatment can lead to lower surgical risk with
shorter recovery time and that it is less expensive when compared to invasive
alternatives. With its successful use in patients outside the United States
since 1991, the Company believes Macroplastique has advantages of being
biocompatible, nonabsorbing, nondegrading, nonmigrating, and cost effective.
Additionally, the product requires no skin testing prior to use and it does not
require refrigeration for storage.

Although Macroplastique is traditionally implanted with the aid of an
endoscope, the Company also markets a patented, non-endoscopic delivery kit
called the Macroplastique Implantation System (MIS) for treatment of female
stress urinary incontinence outside the United States. The MIS is for use by
urologists, gynecologists, and urogynecologists for the implantation of
Macroplastique without the aid of an endoscope. The advantages of this product
are its ease of use, the consistent depth of product placement, and
symmetrical, circumferential implantation of the product at prescribed
locations to achieve urethral closure.

Urinary Incontinence and Vesicoureteral Reflux Markets

Urinary incontinence is an involuntary loss of urine, which has emotional,
social, and hygienic consequences. In varying degrees, urinary incontinence is
a problem suffered by millions of people worldwide. The Agency for Health Care
Policy and Research (AHCPR), a division of the Public Health Service, U.S.
Department of Health and Human Services, estimates that urinary incontinence
affects about 13 million people in the United States of which, 85% or 11
million are women. The same agency estimates the total cost (utilizing all
management and curative approaches) of treating incontinence of all types in
the United States as $15 billion. Bulking agents such as Macroplastique are
used to treat women with SUI caused by intrinsic sphincter deficiency (ISD),
and the National Association For Incontinence (NAFC) estimates that up to 15%
of woman suffering with stress urinary incontinence is a result of intrinsic
sphincter deficiency. Urethral Bulking Agents (UBA) are currently
recommended by AHCPR as first-line treatment for woman with ISD who do not have
coexisting urethral hypermobility. Male patients can benefit from a urethral
bulking agent procedure such as Macroplastique, and according to the AHCPR, UBA
is recommended as first-line surgical treatment for men with ISD. According to
the American College of Surgeons, there are approximately 400,000 prostate
surgeries performed each year in the United States, and up to 20% of these men
develop incontinence following the procedure. Urinary incontinence can result
in a substantial decrease in a persons quality of life, and is often the main
reason a family moves an elderly person to nursing home care. The Company
expects the incidence of urinary incontinence will rise as the percentage of
elderly people continues to increase.

VUR is primarily a pediatric concern, with a prevalence estimated to be up to
2% of the U.S. pediatric population according to research published in
Pediatric Radiology. Approximately 15,000 surgical procedures are performed
each year to address this VUR issue. Patients in this population with VUR
grades 1 through 4 are candidates for Macroplastique treatments. Globally, the
use of Macroplastique to correct the VUR condition can save patient costs
related to continued use of antibiotics for treating these
patients for chronic urinary tract infections. Left untreated, VUR can lead to
more serious related health complications.

Types of Urinary Incontinence

The mechanisms of urinary incontinence are complicated and involve the
interaction between several anatomical structures. In females, urinary
continence is controlled primarily by the sphincter muscle. This muscle
surrounds the urethra and provides constrictive pressure to prevent urine from
flowing out of the bladder. Urination occurs when the sphincter relaxes as the
bladder contracts, allowing urine to flow through the urethra. The urinary
sphincter is also responsible for maintaining continence during periods of
physical stress. Incontinence may result when any part of the urinary tract
fails to function as intended. A number of conditions and disorders can cause
incontinence, including childbirth, pelvic surgery, injuries to the pelvic
region or the spinal cord, neurological diseases (e.g. multiple sclerosis,
poliomyelitis), birth defects (e.g., spina bifida), and degenerative changes
associated with aging.

Stress Urinary Incontinence: SUI refers to the involuntary loss of urine due
to an increase in intra-abdominal pressure from coughing, sneezing, laughing,
straining or lifting. In women, the most common cause of SUI is hypermobility,
a lack of anatomic stability primarily caused by weak surrounding tissue,
resulting in the abnormal movement of the bladder neck and urethra. This
anatomical problem is often the result of childbirth. SUI can also be caused
by intrinsic sphincter deficiency (ISD), or the inability of the sphincter
valve or muscle to function properly. ISD can be due to congenital sphincter
weakness, deterioration of the muscular wall of the urethra after trauma,
spinal cord lesion or radiation therapy. Macroplastique is used to treat
incontinence in women suffering from SUI caused primarily by intrinsic
sphincter deficiency.

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Urge Incontinence: Urge incontinence refers to the involuntary loss of urine
associated with an abrupt, strong desire to urinate. Urge incontinence often
occurs with neurologic problems causing the bladder to contract and empty with
little or no warning.

Overflow Incontinence: Overflow incontinence is associated with an
over-distention of the bladder. This can be the result of an underactive
bladder or an obstruction in the bladder or urethra.

Mixed Incontinence: Mixed incontinence is the combination of both urge and
stress incontinence (and, in some cases, overflow). Since prostate enlargement
often obstructs the urethra, older men often have urge incontinence coupled
with overflow incontinence.

Management and Treatment of Urinary Incontinence

There are two general approaches to dealing with urinary incontinence. One
approach is to manage symptoms with items such as pads or diapers. The other
approach is to undergo curative treatments in an attempt to restore continence,
such as injection of urethral bulking agents or by invasive surgeries. The
Company believes and endorses the treatment of urinary incontinence starting
first with the least invasive therapy then moving to more invasive therapies
only as needed.

Management of Urinary Incontinence

Absorbent Products: Absorbent products are the most common form of management
for urinary incontinence because men and women can use them without consulting
a physician. The cost of adult diapers and pads can be substantial and create
a continuous financial burden for patients. Additionally, this management
technique may require frequent changing of diapers and pads to control patient
embarrassment due to odor and/or soiling.

Behavior Modification: Techniques used in behavior modification include
bladder training, scheduled voiding, and pelvic floor muscle exercises known as
Kegels. Some of the tools used in conjunction with
these training regimes are vaginal cones or weights, biofeedback devices, and
electrical stimulation. Although these techniques are not effective in all
patients, the Company believes biofeedback or one of the other behavior
modification techniques should be used as a first line of treatment.

Penile Compression Devices: Penile clamps are reserved for temporary use with
male incontinence. Complications such as penile and urethral erosion, penile
edema, pain, and obstruction can be associated with extended and/or improper
use.

Pelvic Organ Support Devices: A pessary is a doughnut-shaped device made of
flexible materials designed to temporarily reduce pelvic prolapse and alleviate
symptoms of pelvic relaxation in females with and without incontinence. When
these devices are misused or neglected, complications such as ulceration of the
vagina and rectovaginal and vesicovaginal fistula can occur. Persons using
pessaries require frequent, regular monitoring.

Occlusion Devices: Urethral occlusion devices, or plugs, of various designs
are temporarily applied to occlude the urethra and/or bladder. They are
disposable products and either fit over the urethral opening or in the urethra
and/or bladder to obstruct the involuntary leakage of urine. Problems with
these devices include urinary tract infections, treatment compliance, and
progressive urethral dilation that may require larger plugs over time.

Urinary Catheters and Collection Devices: There are four types of urinary
catheters: 1) intermittent (inserted through the urethra into the bladder
every 3 to 6 hours for bladder drainage; may be appropriate for the management
of acute or chronic urinary retention); 2) indwelling (a closed sterile system
inserted through the urethra to allow bladder drainage; may be needed for
short-term treatment and for terminally ill patients); 3) suprapubic (requires
percutaneous or surgical introduction of a catheter into the bladder through
the abdominal wall, for short-term use following gynecologic, urologic and
other types of surgery or as an alternative to long-term urethral catheter use
in men); and 4) external collection (devices made from latex rubber, polyvinyl
or silicone resembling a condom, are secured on the shaft of the penis by a
double-sided adhesive, latex or foam strap and are connected to urine
collecting bags by a tube; may be useful for short-term maintenance). The type
and severity of incontinence and the patients physical and mental condition
determine the best catheter option for the patient.

Drug Therapy: Drug treatment is used to manage multiple types of urinary
incontinence. These drugs generally fall into one of two categories: those
managing urge incontinence by affecting the contraction of the muscle tissue of
the bladder, and those managing stress incontinence by either affecting
contraction of the muscle tissue of the bladder neck or improving the quality
of the mucosal lining of the bladder neck and urethra. Drugs seldom cure
stress urinary incontinence and the potential side effects include urinary
retention, nausea, dizziness, blurred vision, and the possibility of unwanted
interactions with other drugs.

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Curative Treatments for Urinary Incontinence

Surgery: In women, SUI can be surgically corrected through various suspension
and sling procedures. In these procedures, the physician elevates and
stabilizes the urethra and bladder neck. Current surgical procedures require
vaginal or abdominal incisions and are typically performed under general
anesthesia. Surgery is expensive, traumatic, and can involve a hospital stay
with several weeks required for full recovery. In men, the main surgical
option is an implanted artificial urinary sphincter. It carries with it the
inherent risks of device malfunction, tissue erosion and atrophy, and
infection. In practice, the artificial urinary sphincter is rarely applicable
to the management of uncomplicated stress incontinence.

Injectable Bulking Agents: Urethral Bulking Agents (UAB)s are inserted with a
needle into the area around the urethra, thereby augmenting or bulking the
sphincter. Hence, these materials are often called bulk-enhancing agents,
bulking agents, or injectables. Urethral bulking agents may be either
synthetic or biologically derived and are an attractive alternative to surgery
because they are considerably less invasive than many of the surgical
procedures described above. Active women benefit from the use of urethral
bulking agents since they will often return to normal activities in a matter of
days instead of weeks for fully invasive surgical procedures. Bulking agents
also represent a desirable treatment option for the
elderly or infirm who may not otherwise be able to withstand the trauma and
morbidity resulting from a fully invasive surgical procedure. Additionally,
the use of a UBA does not preclude the use of more invasive treatments later on
if the need arises.

The two major types of urethral bulking agents are biologically derived and
synthetic agents. Biologically derived bulking agents include injections of a
patients own fat cells, polysaccharides (not commercially available in the
U.S.) or bovine collagen. Fat injections involve complex, invasive harvesting
of the patients own fat cells and reinjecting them into the bladder neck.
Some of these biological agents require pre-treatment allergy skin tests, and
since the body resorbs these agents over time, subsequent reinjections may be
necessary. Macroplastique (polydimethylsiloxane) is a synthetic silicone
elastomer bulking agent. Although physicians and patients may question the
silicone issue, we are confident that we provide support and documentation to
show the difference between our silicone elastomer product and the silicone gel
products that were associated with the breast implants. Other synthetic bulking
agents are composed of polytetrafluoroethylene (PTFE) (not commercially
available in the U.S.) and pyrolytic carbon-coated beads.

Marketing, Distribution, and Sales

The Company markets and sells Macroplastique and the related ancillary products
used in the implantation procedure only in countries outside the United States.
The Company has a direct technical sales force in the United Kingdom and
technical sales managers in The Netherlands and the United States to manage and
train a network of distributors selling the Companys products outside the
United States in approximately 40 countries including Canada, Australia, and
countries within Europe, Latin America and the Pacific Rim. Each of the
Companys distributors has a territory-specific distribution agreement
including requirements indicating they may not sell injectable products that
compete directly with Macroplastique. During both fiscal 2003 and 2002,
approximately 12% of the Companys net sales were to one customer.
Collectively, the Companys distributors accounted for approximately 62% and
63% of total net sales in fiscal years 2003 and 2002, respectively.

Other Products

In addition to the urological applications, the Companys implantable tissue
bulking material is also marketed outside the United States for reconstructive
and cosmetic plastic surgery under the trade name Bioplastique Implants,
otolaryngology vocal cord rehabilitation applications under the trade name VOX
Implants, and fecal incontinence applications under the trade name PTP
Implants. In The Netherlands and United Kingdom only, the Companys direct
sales force distributes certain wound care products in accordance with a
Distributor Agreement. Under the terms of the Distributor Agreement, the
Company is not obligated to purchase any minimum level of wound care products.
Collectively, these other products accounted for 15% and 11% respectively, of
the Companys net sales in fiscal 2003 and fiscal 2002.

Government Regulations

The Companys medical device products are subject to regulation by various
governmental agencies depending upon where the products are manufactured and/or
sold. In markets such as the United States and Europe, these regulations are
substantial and can significantly affect a companys ability to obtain and/or
maintain approval for manufacturing and distribution of medical device
products.

In order to market its products within the countries comprising the European
Union, the Company has obtained CE marking for its products (i.e., marketing
approval). In addition, the Company maintains registration to rigorous quality
standards ISO9001, ISO13485 and EN46001 and is subject to periodic surveillance
audits by its Notified Body to ensure

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adherence to the requirements of the
European Medical Device Directives (MDD), as well as the aforementioned quality
standards. Changes in existing requirements or adoption of new requirements or
policies could adversely affect the ability of the Company to comply with
regulatory requirements. Failure to comply with regulatory requirements could
have a material adverse effect on the Companys business, financial condition,
and results of operations. There can be no assurance the Company will not be
required to incur significant costs to comply with laws and
regulations in the future, or that laws or regulations will not have a material
adverse effect upon the Companys business, financial condition, or results of
operations.

The Company maintains facilities in the United States, United Kingdom, and The
Netherlands, each of which has numerous federal, state, and local laws relating
to such matters as safe working conditions, manufacturing practices,
environmental protection, fire hazard control and disposal of hazardous or
potentially hazardous substances. To the best of our knowledge, the Company
complies with all applicable local, state and national laws. There can be no
assurance the Company will not be required to incur significant costs to comply
with such laws and regulations now or in the future or that such laws or
regulations will not have a material adverse effect upon the Companys ability
to do business, financial condition, or results of operations.

The Company is structured such that The Netherlands subsidiary conducts
business as a manufacturer and international sales office, and is responsible
for the worldwide distribution of its products outside of the United States
through our network of independent distributors. The United Kingdom subsidiary
is responsible for direct sales and distribution of the Companys products to
hospitals and physicians within the United Kingdom and Ireland. As a result of
our corporate structure, the U.S. regulation regarding medical exports that are
not FDA approved does not materially affect our business. In the United States,
the Company must comply with the Federal Food, Drug, and Cosmetic Act, as
amended, which is enforced by the FDA. The FDA has determined urethral bulking
agents such as Macroplastique are Class III devices subject to a Pre-Market
Approval (PMA) application prior to marketing in the United States.

A PMA is a rigorous submission requiring the manufacturer to substantiate
claims of safety and effectiveness with valid scientific evidence. The PMA
process is lengthy and expensive with no guarantee of final approval at its
completion. In some instances, the FDA may decide additional testing or
clinical studies are necessary to support the PMA submission. Such a decision
considerably lengthens the time and expense required for obtaining U.S.
marketing approval. If the FDA approves the PMA submission, it may still place
certain conditions on the manufacturer such as the initiation of a
post-marketing study or restrictions to the products intended use.

After PMA approval, the Company must comply with FDA regulations to maintain
its U.S. marketing approval. The Companys manufacturing facilities will be
subject to routine inspections by the FDA to ensure compliance with U.S.
Quality System Requirements. Even though the Company has achieved ISO9001,
ISO13485 and EN46001 registrations, there can be no assurance the FDA would
find the Companys quality system to be in compliance with all relevant aspects
of the U.S. requirements. The Company is also subject to a variety of state
and local laws and regulations in those states or localities where its product
will be manufactured and/or marketed. Any applicable state or local
regulations may hinder the Companys ability to market its products in those
states or localities.

Third-Party Reimbursement

Reimbursement systems vary significantly by country. Third-party payors consist
of government health programs, private health insurance plans, managed care
organizations and other similar programs. Outside of the United States,
government managed health care systems control reimbursement for devices and
procedures such as Macroplastique. Reimbursement for Macroplastique has been
successful in multiple international markets where hospitals and physicians
have been able to get budgets approved by fund-holder trusts or global hospital
budgets. Physicians or hospitals that apply, but do not receive satisfactory
reimbursement from either third-party payors or the government, may choose not
to use Macroplastique, and the sales of our products could be affected. Upon
FDA approval to market Macroplastique in the United States, Uroplasty will need
to apply for and gain acceptance from Medicare and other third-party
reimbursement. There is no uniform policy for reimbursement throughout the
United States, and no guarantee Macroplastique will be reimbursed at the levels
expected by the Company, if at all.

Product Liability

The medical device industry is subject to substantial litigation. The Company
is a manufacturer of a long-term implantable device and consequently faces an
inherent business risk of exposure to product liability claims resulting from
alleged adverse effects to the patient. The Company currently carries $2
million of worldwide product liability insurance on a claims made form, plus
another policy specific to the United Kingdom only. There can be no assurance,
however, the Companys existing insurance coverage limits are adequate to
protect the Company from any liabilities it might incur in connection with the
clinical trials of Macroplastique or the initial commercialization of
Macroplastique in the United States. There can be no assurance that liability
claims will not exceed coverage limits. Such insurance is expensive and in the
future may not be available on acceptable terms, if at all. Furthermore, the
Company does not expect to be able to

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obtain insurance covering its costs and
losses as a result of any recall of its products due to alleged defects,
whether such a recall is instituted by the Company or required by a regulatory
agency. A product liability claim, recall, or other claim with respect to
uninsured liabilities or in excess of insured liabilities could have a material
adverse effect on the business, financial condition, and results of operations
of the Company.

Manufacturing

The Company manufactures its tissue bulking products at its own facilities.
Components are manufactured in the United States, and finished products are
manufactured in The Netherlands from medical grade materials obtained from
suppliers qualified by the Companys Quality Department. The Companys
facilities utilize dedicated heating, ventilation, and high efficiency
particulate air (HEPA) filtration systems for the manufacturing areas to
provide a controlled working environment. All manufacturing processes are
performed by trained production technicians according to written procedures
approved by the Companys Quality Department. All critical manufacturing
processes are performed in a cleanroom environment. An outside vendor
sterilizes the Companys products using validated methods and returns the
products to the Company for final inspection and testing.

The Companys manufacturing facilities are periodically audited by an
independent registrar to ensure compliance with ISO9001 ISO13485 and EN46001
quality system requirements. Prior to marketing the product in the United
States, the Company will also be inspected by the U.S. FDA and will be subject
to additional state, local, and federal government regulations applicable to
the manufacture of the Companys products. See Description of Business 
Government Regulations.

Competition

Competition in the urinary incontinence products market is intense. The Company
faces competition from existing manufacturers of management and curative
treatments, competing manufacturers of commercially available bulking agents,
and from companies developing new or improved treatment methods. The Company
believes the principal competitive factors among treatment methods include
physician and patient acceptance of the method in managing or curing
incontinence, cost and availability of third-party reimbursement, marketing and
sales capability, and the existence of meaningful patent protection. The
Companys ability to compete in this market also will depend on the consistency
of its product quality as well as delivery and product pricing. Other factors
within and outside the Companys control include its product development and
innovation capabilities, ability to obtain required regulatory approvals,
ability to protect its proprietary technology, manufacturing and marketing
capabilities, and ability to attract and retain skilled employees.

Other soft-tissue injectable urethral bulking agents competing directly with
Macroplastique for the treatment of stress urinary incontinence are Contigen®
manufactured by C.R. Bard, Inc., Zuidex® manufactured by Q-Med AB, and
Durasphere® manufactured by Carbon Medical Technologies, which is marketed in
the U.S. by Boston Scientific. In addition, the Company believes Curis, Inc.,
Protein Polymer Technologies, Genyx Medical, and Bioform, Inc. are performing
research and development and/or are seeking regulatory approval for various
types of soft-tissue injectable bulking agents for treatment of urinary
incontinence. The soft-tissue bulking agent Deflux®, manufactured by Q-Med AB
competes against Macroplastique for the treatment of vesicoureteral reflux. In
contrast to the products currently approved for sale, Macroplastique, marketed
outside the United States since 1991, is a synthetic material
that will not degrade, become resorbed or migrate, and does not require the
patient to have a skin test prior to the procedure. The silicone-elastomer
material has been studied for over 50 years in medical use for such urological
applications as penile implants, stents and catheters. The Uroplasty patented
Macroplastique Implantation System (MIS) offers a unique, non-endoscopic,
minimally invasive delivery system that can be used in the physician office
with Macroplastique as an out-patient procedure. The Company expects continued
stiff competition with Johnson & Johnson, American Medical Systems, C.R. Bard
Inc., Cook Urological, Boston Scientific Corporation and others who manufacture
urinary incontinence surgical products such as sling devices. These companies
have the advantage to bundle their incontinence products or devices onto
contracts that require a hospital to purchase the incontinence device in order
to maintain discounts on other product lines.

Many of the Companys competitors and potential competitors have significantly
greater financial, manufacturing, marketing, distribution and technical
resources, and experience than the Company. In addition, many of the Companys
competitors offer broader product lines within the urology market, which may
give such competitors the ability to negotiate exclusive, long-term supply
contracts and to offer comprehensive pricing for their products. It is
possible other large health care and consumer products companies may enter this
industry in the future. Furthermore, smaller companies, academic institutions,
governmental agencies, and other public and private research organizations will
continue to conduct research, seek patent protection, and establish
arrangements for commercializing products. Such products may compete directly
with any products that may be offered by the Company in the future.

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Dependence on One or a Few Major Customers

Both during fiscal 2003 and 2002, approximately 12% of the Companys net sales
were to one customer.

Patents, Trademarks, and Licenses

The Companys success depends in part on its ability to obtain and maintain
patent protection for its products, preserve its trade secrets, and operate
without infringing the proprietary rights of third parties. The Company seeks
to protect its technology by filing patent applications for patentable
technologies it considers important to the development of its business based on
an analysis of the cost of obtaining a patent, the likely scope of protection,
and the relative benefits of patent protection compared to trade secret
protection, among other considerations. The Company also relies upon trade
secrets, know-how, and continuing technological innovation to develop and
maintain its competitive position.

Multiple patents covering the Macroplastique materials, processes, and
applications have been issued to the Company by the Patent Offices in the
United States, United Kingdom, Japan, Germany, The Netherlands, and Canada.
Such patents will expire in the U.S. at various times between 2010 and 2013.
Applications are also currently pending in various other European countries.
There can be no assurance any of the Companys pending and/or future U.S.
and/or foreign patent applications will result in issued patents, or that any
issued patents will be of sufficient scope or strength to provide meaningful
protection of the Companys products. The coverage sought in a patent
application can be denied or significantly reduced before the patent is issued.
In addition, there can be no assurance any current and/or future U.S. and/or
foreign patents of the Company will not be challenged or circumvented by
competitors or others, or that such patents will be found to be valid or
sufficiently broad to protect the Companys technology or provide the Company
with any competitive advantage. Should attempts be made to challenge,
circumvent, or invalidate the Companys patents in the U.S. Patent and
Trademark Office or courts of competent jurisdiction, including administrative
boards or tribunals, the Company may have to participate in legal or
quasi-legal proceedings therein to maintain, defend, and/or enforce its rights
in these patents. Any legal proceedings to maintain, defend, and/or enforce the
Companys patent rights could be lengthy and costly, with no guarantee of
success.

The Company also relies heavily upon trade secrets and other proprietary
information. The Company seeks to maintain the confidentiality of such
information by requiring employees, consultants, and other parties to sign
confidentiality agreements, and by limiting access by parties outside the
Company to such information. There can be no assurance, however, these measures
will prevent the unauthorized disclosure
or use of this information or that others will not be able to independently
develop such information. Additionally, there can be no assurance any
agreements regarding confidentiality and non-disclosure will not be breached,
or, in the event of any breach, that adequate remedies would be available to
the Company.

In 1992, the Company agreed to settle alleged patent infringement claims by
Collagen Corporation (now Inamed Corporation). Under the settlement agreement,
the Company pays Collagen a royalty of 5% of net sales in the U.S. of
Macroplastique products with a minimum of $50,000 per year. The agreement is
through May 1, 2006.

Claims by competitors, such as Collagen and other third parties, that the
Companys products allegedly infringe the patent or other intellectual property
rights of others, could have a material adverse effect on the Company. There
has been substantial litigation regarding patent and other intellectual
property rights in the medical device industry, and intellectual property
litigation may be used against the Company as a means of gaining a competitive
advantage. Intellectual property litigation is complex, time-consuming, and
expensive, and the outcome of such litigation is difficult to predict. Any
future litigation, regardless of outcome, could result in substantial expense
to the Company and significant diversion of the efforts of the Companys
technical and management personnel. An adverse outcome in any litigation could
subject the Company to significant liabilities to third parties, require
disputed rights to be licensed from others, if licenses to such rights could be
obtained, or require the Company to cease making, using, or selling certain
products. There can be no assurance that any licenses required under any
patents or proprietary rights would be made available on terms acceptable to
the Company, if at all. In addition to being costly, protracted litigation to
defend or prosecute intellectual property could result in the Company being
unable to commercialize Macroplastique on a timely basis or at all, and could
have a material adverse effect on the Companys business, financial condition,
and results of operations.

Although the Company intends to apply for additional patents and vigorously
defend issued patents, management believes its success as a business will
depend primarily upon its development and marketing skills, and the quality and
economic value of its products rather than on its ability to obtain and defend
patents.

The Company has a Royalty Agreement with three individuals, two of whom are
former Officers and Directors. Under such Agreement, the Company pays
royalties, in the aggregate, of three to five percent of net sales of
Macroplastique and Bioplastique, subject to a monthly minimum of $4,500. The
royalties payable under this Agreement will continue until the patent
referenced in the Agreement expires in 2010.

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In December 1995, the Company obtained a license from a British surgeon, which
became superseded by a subsequent Agreement entered into by the parties in
October 1998. Pursuant to this subsequent Agreement, the Company received an
absolute assignment of a patent relating to the Macroplastique Implantation
System in return for a royalty of 10 British pounds for each unit sold during
the life of the patent. The Company began commercialization of the product
outside the U.S. in March 2000.

Research and Development

The Company has a Research and Development program to develop new products in
the field of incontinence. The Company is also continually evaluating
potential improvements as well as new methods and devices for the implantation
of Macroplastique and on new applications for this material. R&D expenses also
include the costs of clinical studies including the U.S. clinical trial
currently underway pursuant to the IDE approved by the FDA. Expenditures for
R&D totaled $2,067,725 and $1,685,000 for the fiscal years ended March 31, 2003
and 2002, respectively. None of these costs were borne directly by customers.

Compliance with Environmental Laws

Compliance by the Company with applicable environmental requirements during its
fiscal years ended March 31, 2003 and 2002 has not had a material effect upon
its capital expenditures, earnings, or competitive position.

Employees

As of March 31, 2003, the Company had 38 employees, of which 31 were full-time
and 7 part-time. No employee has a collective bargaining agreement with the
Company. The Company believes it maintains good relations with its employees.

Incorporation and Current Subsidiaries

The Company was incorporated in January 1992 as a Minnesota Corporation and a
wholly owned subsidiary of its parent. In February 1995, the Company became a
stand-alone, privately held company pursuant to a Plan of Reorganization
confirmed by the U.S. Bankruptcy Court. The Companys shares became registered
and the Company became a reporting company pursuant to a registration statement
filed with the Securities and Exchange Commission in July 1996.

The Companys wholly owned foreign subsidiaries and their respective principal
functions are as follows:

|              |  |                                                                                                                                                                                                        
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Uroplasty BV  |  | Incorporated in The Netherlands, is the manufacturer of
Macroplastique, Bioplastique, VOX Implants, PTP Implants and
of all their accessories, and sells its products through
distributors.            
|              |  |                                                                                                                                                                                                        
|Uroplasty LTD |  | Incorporated in the United Kingdom and acts as the sole
distributor of Macroplastique, Bioplastique, PTP Implants,
all of their accessories, and wound care products in the
United Kingdom and Ireland.
|              |  |                                                                                                                                                                                                        
|Bioplasty BV  |  | Incorporated in The Netherlands and is the distributor of
Bioplastique to subdistributors, and distributes wound care
products in The Netherlands.                                                     

Factors Affecting the Business

The following factors are important and should be considered carefully in
connection with any evaluation of the Companys business, financial condition,
results of operations and prospects. Additionally, any one or combination of
the following factors could cause the Companys actual results to materially
differ from those reflected in any forward-looking statements of the Company.

Government Regulation: The Companys product, manufacturing processes, and
product development activities are subject to extensive and rigorous regulation
by governmental and regulatory authorities in foreign countries, similar to the
U.S. Food and Drug Administration (FDA). In Europe, where Macroplastique has
been used since 1991, the Companys introduction of medical devices as well as
the design, manufacturing, labeling, distribution, sale, marketing,
advertising, promotion, and record keeping procedures for the Companys
products are subject to laws and regulations governing medical devices
contained in the European Medical Device Directives (MDD). The Companys
products are not sold in the United States as of yet because submissions have
not been made to the FDA for marketing in the United States.

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In the United States, most of the Companys products are subject to Pre-Market
Approval (PMA) application with the FDA prior to marketing. In 1999, Uroplasty
received approval from the FDA of an Investigational Device Exemption (IDE)
relating to a U.S. clinical trial for the treatment of female stress urinary
incontinence (SUI) using Macroplastique. Upon successful completion of the
clinical trial, the Company plans to submit a PMA application to the FDA
requesting approval to commercialize Macroplastique in the U.S. There can be
no assurance the U.S. clinical trials will be successfully completed or that
the requisite approvals or certifications will be granted for Macroplastique or
any other product on a timely basis, or at all, or that such regulatory reviews
will not involve delays that would conflict with the Companys ability to
commercialize its products in the U.S.

If and when regulatory approval to market a product is obtained from the FDA,
this approval may necessitate limitations on the indicated uses of the product.
Marketing approval can also be withdrawn by the FDA in the United States (and
by regulatory authorities in foreign countries) due to failure to comply with
regulatory requirements or the occurrence of unforeseen problems following
initial approval. The Company may be required to make further filings with the
FDA and other regulatory authorities in foreign countries under certain
circumstances, such as the addition of product claims or product reformulation.
The FDA and other regulatory authorities in foreign countries could also limit
or prevent the manufacture and/or distribution of the Companys products and
have the power to demand the recall of such products. Medical device
regulations depend strongly on administrative interpretation, and there can be
no assurance future interpretation made by the FDA or other regulatory bodies,
with possible retroactive effect, will not adversely affect the Company. The
FDA and various other authorities either currently inspect or will inspect the
Companys facilities from time to time to determine whether Uroplasty is in
compliance with regulations relating to medical device manufacturing including
regulations concerning design, manufacturing, testing, quality control, product
labeling, distribution, promotion, and record keeping practices. A
determination that the Company is in material violation of such regulations
could lead to the imposition of civil penalties, including fines, product
recalls, product seizures or, in extreme cases, criminal sanctions.

Effects of Technological Developments: The Company competes in a market
characterized by technological innovation, extensive research efforts, and
significant competition. Improvements in existing treatment options or
developments of new treatment methods may have a material adverse effect on the
Companys ability to increase sales of Macroplastique, successfully
commercialize any future products, and may render such products noncompetitive
or obsolete. Other companies are currently engaged in the development of
products and innovative methods for treating SUI that are similar to or
competing with Macroplastique and these companies may have greater financial
resources and know how than the Company. Significant developments by any of
these companies or advances by medical researchers could eliminate the market
for Macroplastique or otherwise render Macroplastique obsolete. Although
technological change has not had a direct material impact on the Company in
recent years, the potential such a change might occur is a continuing risk for
the Company.

Macroplastique Market Acceptance: The Company currently sells Macroplastique
in Europe, Canada and other countries outside the United States. The Companys
products are not sold in the United States as of yet because submissions have
not been made to the FDA for marketing in the United States. Acceptance of
Macroplastique by physicians in preference to other treatment options,
including other bulking agents, will depend upon the demonstration of its
safety and effectiveness, relative performance of Macroplastique compared to
other market approved products, availability of other treatment options, and
ease of use and relative cost compared to treatment options including other
bulking agents. Physicians may elect not to use Macroplastique unless adequate
reimbursement from health care payers is available. Health care payer
acceptance of a treatment utilizing Macroplastique will require, among other
things, evidence of the cost effectiveness of this treatment as compared to
other treatment options. There can be no assurance the acceptance of
Macroplastique by urological and gynecological health care providers will
develop or continue to grow in countries where Macroplastique is already used.

Single Product: The Company currently derives over 85% of its net sales from
Macroplastique and related products. Discontinuance or reduction of revenues
from Macroplastique sold outside of the U.S. could therefore have a material
adverse effect on the Companys business, financial condition, and results of
operations. The Company does not expect commercialization of other new
products will be feasible without a substantial, continuing commitment to
research and development for an extended period of time or acquisitions of new
products, or both. Also, new medical products must typically undergo clinical
trials and regulatory clearance or approval before commercialization. There
can be no assurance as to whether or when commercialization of other products
might begin or as to the likelihood that any such initiative would be
successful. The market for medically-related products changes constantly. If
the market changes, new or strengthened competition emerges, customer
preferences change, and/or new technology causes Macroplastique to be viewed as
a less effective treatment, the Companys business, financial condition, and
results of operation would be adversely affected.

Patents and Proprietary Rights: The Companys success depends in part on the
ability to preserve trade secrets, obtain and maintain patent protection for
Uroplastys products under United States and international patent laws and
other intellectual property laws, and operate without infringing upon the
proprietary rights of third parties. Patents covering

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the materials, process,
and applications have been issued to the Company by the Patent Offices in the
United States, United Kingdom, Japan, Germany, The Netherlands, and Canada.
Applications are also currently pending in various other European countries.
No assurances can be given that the scope of any patent protection will prevent
competitors (most of which have financial and other resources substantially
greater than the Company) from introducing products competitive with the
Companys products, the Companys patents will be held valid if subsequently
challenged, others will not claim rights in or ownership of the patents and
other proprietary rights held by the Company, or the Companys product and
processes will not infringe, or be alleged to infringe, the proprietary rights
of others.

A number of patents have been issued to others in the area of injectable
bulking agents. The validity and breadth of claims covered in medical device
technology patents involve complex legal and factual questions and may
therefore be highly uncertain. The Company also relies upon unpatented trade
secrets to protect the Companys proprietary technology. No assurance can be
given that others will not independently develop or otherwise acquire
substantially equivalent techniques and/or gain access to and disclose the
Companys proprietary technology. Further, no assurance can be given that the
Company can ultimately protect meaningful rights to such unpatented proprietary
technology. There has been substantial litigation regarding patent and other
intellectual property rights in the medical device industry. Companies in the
medical device industry have employed intellectual property litigation to gain
a competitive advantage. Litigation may be necessary to enforce any patents
issued to the Company, protect trade secrets or proprietary information owned
by the Company against claimed infringement of the rights of others, or
determine the scope and validity of the proprietary rights of others. The
defense and prosecution of patent litigation or other legal and/or
administrative proceedings related to patents is costly and time-consuming
regardless of the outcome. An adverse outcome in any litigation could subject
the Company to significant liabilities to third parties, require disputed
rights to be licensed from others, and/or require the Company to cease making,
using, or selling any products. There can be no assurance that any licenses
required under any patents or proprietary rights would be made available on
terms acceptable to the Company, if at all.

Public Reaction to Silicone Products: Macroplastique is comprised of medical
grade heat-vulcanized polydimethylsiloxane, which results in a solid, flexible
silicone elastomer. In the early 1990s the United States breast implant
industry became the subject of significant controversies surrounding the
possible effects upon the human body of the use of silicone gel in breast
implants resulting in product liability litigation, leading to the bankruptcy
of several companies, including Uroplastys former parent, Bioplasty, Inc. The
Company uses only medical grade solid silicone material in its tissue bulking
products and not semi-liquid silicone gel as was used in breast implants.
However, there can be no assurance that the use by the Company and others of
solid silicone in medical devices implanted in the human body will not result
in controversies, litigation, or negative publicity from news media,
competitors or regulatory investigations. Furthermore, there can be no
assurance that in the event such negative publicity occurred, that it would not
have a significant adverse effect on the Companys future financial position or
results of operations.

Third-Party Reimbursement: Any success of the Company will depend, in part,
upon satisfactory reimbursement for Macroplastique procedures from third-party
health care payers. In the U.S. and many foreign countries, third-party
reimbursement is currently generally available for surgical procedures for
urinary incontinence, but there is no uniform policy for such reimbursements.
The Company sells Macroplastique to physicians, hospitals and other users which
bill various third-party payers, such as government health programs, private
health insurance plans, managed care organizations, and other similar programs
for the health care products and services provided to their patients. Payers
may deny reimbursement if they determine a product used in a procedure was not
used in accordance with established payer protocols regarding cost-efficient
treatment methods, was used for an unapproved indication or was not otherwise
covered. Third-party payers are increasingly challenging the prices charged
for medical products and services and, in some instances, have pressured
medical suppliers to lower their prices. The availability of third-party
reimbursement for Macroplastique or competitors products and continuing
efforts to reduce the costs of health care by decreasing reimbursement rates
may reduce the price received
by the Company for Macroplastique or increase the relative expense to the
consumer. The Company believes a material amount of Macroplastique revenues
are received from third-party payers; therefore failure to receive sufficient
reimbursement from health care payers for procedures using Macroplastique or
adverse changes in governmental and third-party payers policies toward
reimbursement for such procedures would materially adversely affect the
Companys business, financial condition, and results of operations.

Clinical Studies: There are numerous abstracts and articles that support
Macroplastique for the treatment of SUI and VUR published in the scientific
literature. The majority of these publications are uncontrolled, which
preclude their use in obtaining marketing clearance in the United States.
Consequently, the Company is currently conducting a human clinical trial
pursuant to an IDE approval by the FDA that will provide a controlled,
prospective clinical study concerning Macroplastique treatment for female SUI.
Until this study is completed, no assurance can be given that Macroplastique
will receive marketing clearance in the United States.

Raw Material / Component Suppliers: The Company currently purchases certain
materials from single, qualified and approved sources. Alternative suppliers
for all these materials exist should the current suppliers discontinue
production or distribution. However, the Company would need to complete
additional testing to qualify the materials obtained from

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any new suppliers.
Limited notice of the need to switch suppliers for any of these materials could
result in production delays and inventory depletion, and alternative suppliers
could charge prices significantly higher than current costs. The Company has
not experienced any shortage of these materials to date; however, no assurance
can be given that shortages of these materials will not be experienced in the
future.

Research and Development Expenses and Expected Losses: The Companys future
success will depend upon, among other factors, its ability to introduce and
market Macroplastique on a timely basis in the U.S. The development and
commercialization by the Company of Macroplastique and other products in the
U.S. will require substantial clinical, regulatory, and other expenditures for
the foreseeable future.

Additional Capital Requirements: As a result of the proceeds of the Rights
Offering, management believes that current resources and the funds generated
from sale of the Companys products outside the U.S. will be adequate to meet
the Companys cash flow needs, including R&D activities associated with
existing products and markets through fiscal 2004. In the event product sales
and/or expenses differ from expected levels, the Company may require additional
financing to complete the IDE clinical study and Pre-market Approval
application for Macroplastique in the U.S. Further, the Company may seek
additional funds for U.S. market introduction of Macroplastique for female SUI,
as well as for U.S. approval for the Companys products in other indications.

International Operations and Currency Fluctuations: The Company currently
sells its products only outside the U.S. through its wholly owned foreign
subsidiaries. Sales and operations outside of the U.S. are subject to certain
inherent risks, including, without limitation, fluctuations in the value of the
U.S. dollar relative to foreign currencies, tariffs, quotas, taxes and other
market barriers, political and economic instability, restrictions on the import
and export of technology, difficulties in staffing and managing international
operations, difficulties in obtaining work permits for employees, difficulties
in collecting receivables, potentially adverse tax consequences, potential
language barriers, and difficulties in operating in a different culture and
legal system. There can be no assurance that any of these factors will not
have a materially adverse effect on the Companys financial condition or
results of operations. In particular, because the Companys international
sales are denominated primarily in euros, currency fluctuations in countries
where the Company does business may render the Companys products less price
competitive than those of competing companies whose sales are denominated in
weaker currencies. The Company reports its financial results in U.S. dollars,
and fluctuations in the value of either the dollar or the currencies in which
the Company transacts business can have a negative impact on its financial
condition or results of operations. Consequently, the Company has exposure to
foreign currency exchange risks. The Company attempts to lessen that exposure
by keeping to a minimum the amount of time trade payables and receivables are
outstanding, and by denominating product sales in a currency which historically
has been more stable than other foreign currencies. However, there can be no
assurance that historical stability of
any currency is any indication of its future stability. The currency gain in
fiscal 2003 is primarily the result of a weakened U.S. dollar compared to the
euro. In January 2003 the Company recapitalized one of the Dutch subsidiaries
with an investment of 1.5 million euros ($1.6 million). The proceeds from the
investment were used to reduce the dollar denominated intercompany debt at the
Dutch subsidiary. This will result in less volatility for changes in currency
exchange rates in the Companys statement of operations.

Limited Public Market for Common Stock; Possible Stock Price Volatility: There
is only a limited trading market for the Companys common stock. There is no
assurance that purchasers of the Companys securities will be able to resell
their shares for a profit. Announcements of new products and services by the
Company or its competitors, technological innovations by competitors, disputes
regarding patents or other proprietary rights, regulatory developments and
economic and other external factors, as well as period-to-period fluctuations
in the Companys financial results, could cause the market price of the
Companys Common Stock to fluctuate significantly. In addition, the stock
market in general, and in particular the market prices for medical technology
companies, has historically experienced significant volatility which has
affected the market price of securities of many companies and which has
sometimes been unrelated to the operating performance of such companies. Such
volatility may adversely affect the market price of the Companys Common Stock.




ITEM 2. DESCRIPTION OF PROPERTY

The Company owns office and warehouse space at Hofkamp 2, 6161 DC Geleen, The
Netherlands. In addition, the Company leases office, warehouse, laboratory and
production space through February 2006 at 2718 Summer Street NE, Minneapolis,
Minnesota 55413-2820, USA; office and warehouse space through September 2011
(subject to a right of the Company to terminate early starting in 2006) at Unit
3, Woodside Business Park, Whitley Wood Lane, Reading, Berkshire RG2 8LW,
United Kingdom; and office, warehouse, laboratory and manufacturing space
through June 2007 at Industrieweg 12, 5627 BS Eindhoven, The Netherlands. The
Company considers its facilities adequate; however, additional office,
production, and warehouse space may be necessary upon FDA approval and
subsequent increases in production, marketing, and sales activities in the U.S.

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ITEM 3. LEGAL PROCEEDINGS

None.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matter to a vote of its security holders during
the fourth quarter of its recently completed fiscal year.




PART II




ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of the date hereof, there is only a limited public trading market for the
Companys Common Stock.

The following table sets forth the high and low bid prices for the Companys
Common Stock, as reported in the NASDS Bulletin Board system (market symbol
UPST.OB ; formerly UROP.OB) on a quarterly basis,
from April 2002 through March 2003. Such quotations represent interdealer
prices, without retail markup, mark down or commission, and do not necessarily
represent actual transactions.

|                |  |         |      |          |  |   |      | 
|--------------- |  | ------- | ---- | -------- |  | - | ---- | 
|Fiscal Quarters |  | Low Bid |      | High Bid
|First Quarter   |  | $       | 1.05 |          |  | $ | 3.25 | 
|Second Quarter  |  |         | 1.00 |          |  |   | 1.25 | 
|Third Quarter   |  |         | 0.90 |          |  |   | 1.50 | 
|Fourth Quarter  |  |         | 1.15 |          |  |   | 2.95 | 

As of March 31, 2003, approximately 535 holders held the Companys Common Stock
of record. Registered ownership includes nominees who may hold securities on
behalf of multiple beneficial owners.




ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THIS DISCUSSION OF THE FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS OF THE
COMPANY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS ENTIRETY
BY, THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE
WITHIN THIS ANNUAL REPORT, THE MATERIAL CONTAINED IN THE RISK FACTORS AND
BUSINESS SECTIONS OF THIS ANNUAL REPORT, AND THE CAUTIONARY DISCLOSURE ABOUT
FORWARD-LOOKING STATEMENTS AT THE FRONT OF PART I OF THIS ANNUAL REPORT.

Overview

Uroplasty, Inc. develops, manufactures, and/or markets medical products in
certain segments of the urology, gynecology, urogynecology, colon and rectal,
wound care, otolaryngology and plastic surgery markets. Products sold by the
Company are subject to regulation by the U.S. FDA and/or various regulating
agencies in countries outside the U.S. Existing sales have been, and future
sales growth is expected to be, derived from Macroplastique and related
ancillary products designed for use by urologists, gynecologists, and
uro-gynecologists for the primary treatment of stress urinary incontinence
(SUI) and for the treatment of vesicoureteral reflux (VUR), a condition in
which urine flows backward from the bladder to the kidney. Macroplastique is
comprised of soft, irregularly textured, vulcanized, medical grade silicone
elastomer implants suspended in a biocompatible carrier solution. When
injected via a minimally invasive procedure in the soft tissue of the
mid-urethra and bladder neck (in the case of SUI), and at the ureteral orifice
(in the case of vesicoureteral reflux), the implants act as a bulking material
to restore urinary continence or to eliminate reflux of urine from the bladder
to the kidneys.

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In addition to the urological applications, the Companys implantable tissue
bulking material is also marketed by the Company outside the U.S. for
reconstructive and cosmetic plastic surgery applications under the trade name
Bioplastique Implants; fecal incontinence applications under the trade name
PTP Implants; and vocal cord rehabilitation under the trade name VOX
Implants. In The Netherlands and the United Kingdom, the Companys direct
sales force distributes certain wound care products on behalf of another
company in accordance with an executed Distributor Agreement. Under the terms
of the Distributor Agreement, the Company is not obligated to purchase any
minimum level of wound care products.

The Companys products are currently sold by direct sales forces in the United
Kingdom and The Netherlands, and by a network of distributors in numerous
countries outside the U.S., including Western Europe, Australia, and Central
and South America. The Company is currently conducting a multi-center human
clinical trial with its urethral bulking agent, Macroplastique, pursuant to an
FDA IDE as a minimally invasive, office-based procedure for treating female
SUI. This study is required as part of a Premarket Approval Submission to the
FDA for marketing within the United States.

The Companys current objectives are to focus on sales and marketing activities
designed to increase market penetration and sales of Macroplastique for SUI,
VUR, and of PTP Implants for fecal incontinence applications in countries
outside the U.S., and to efficiently and effectively execute the Macroplastique
human clinical study for treatment of female SUI within the U.S.

The Companys net income during fiscal 2003 was the result of non-recurring
items related to foreign currency exchange gains of $530,083 and a settlement
income of $180,000.

CRITICAL ACCOUNTING POLICIES

The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the U.S., which require the Company
to make estimates and assumptions in certain circumstances that affect amounts
reported. In preparing these financial statements, management has made its best
estimates and judgments of certain amounts, giving due consideration to
materiality. The Company believes that of its significant accounting policies
(more fully described in Note 1 to the consolidated financial statements), the
following are particularly important to the portrayal of the Companys results
of operations and financial position and may require the application of a
higher level of judgment by the Companys management, and as a result are
subject to an inherent degree of uncertainty.

Revenue Recognition and Accounts Receivable. The Securities and Exchange
Commissions Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition
provides guidance on the application of generally accepted accounting
principles to selected revenue recognition issues, and the Companys revenue
recognition policies are in compliance with SAB 101. The Company markets and
distributes its products through a network of distributors and through direct
sales to end-users in the United Kingdom and The Netherlands. The Company
recognizes revenue upon shipment of product to its distributors and direct
customers. There are no customer acceptance provisions or Company installation
obligations. The Companys sales terms to its distributors and customers
provide no right of return outside of the Companys standard warranty policy
(see Note 1 to the consolidated financial statements), and payment terms
consistent with industry standards apply. Sales terms and pricing to the
Companys distributors are governed by the respective distribution agreements.
The Companys distribution partners purchase the Companys products to meet
sales demand of their end-user customers as well as to fulfill their internal
requirements associated with the sales process and, if applicable, contractual
purchase requirements under the respective distribution agreements. Internal
and other requirements include purchases of products for training,
demonstration and evaluation purposes, clinical evaluations, product support,
establishing inventories, meeting minimum purchase commitments. As a result,
the level of the Companys revenue during any period is not necessarily
indicative of its distributors sales to end-user customers during that period,
which are estimated not to be substantially different than the Companys sales
to those distributors in each of the last two years. The Companys future
revenue growth may be impacted by its distributors level of inventories of the
Companys products, their sales to end-user customers and their internal
product requirements.

Inventories. Inventories are stated at the lower of cost or market using the
first-in, first-out method. Reserves for slow moving and obsolete inventories
are provided based upon current and expected future product sales and the
expected impact of product transitions or modifications. While the Company
expects its sales to grow, a reduction in its sales could reduce the demand for
the Companys products, and additional inventory reserves may be required.

Foreign Currency Translation/Transactions. The financial statements of the
Companys foreign subsidiaries were translated in accordance with the
provisions of SFAS No. 52 Foreign Currency Translation. Under this
Statement, all assets and liabilities are translated using period-end exchange
rates and statements of operations items are translated using average exchange
rates for the period. The resulting translation adjustment is recorded within
accumulated other comprehensive loss, a separate component of shareholders
equity. Foreign currency transaction gains and losses are recognized currently
in the statement of operations, including unrealized gains and losses on
short-term inter-company

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obligations using period-end exchange rates, resulting in an increase in the volatility of
the Companys Statements of Operations. Unrealized gains and losses on
long-term inter-company obligations are recognized within accumulated other
comprehensive loss, a separate component of shareholders equity.

Impairment of Long-Lived Assets. Long-lived assets at March 31, 2003 consist of
property, plant and equipment. The Company reviews its long-lived assets for
impairment whenever events or business circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to
future undiscounted net cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.

Set forth below is managements discussion and analysis of the financial
condition and results of operations for the fiscal years ended March 31, 2003
and 2002. See Note 6 to the Consolidated Financial Statements for business
segment information.

Results of Operations

Net Sales: The Macroplastique product line accounted for 85% and 89% of total
net sales for the years ended March 31, 2003 and 2002, respectively. In fiscal
year ended March 31, 2003, net sales of all products were $5,343,656,
representing a $369,680 or 7% increase when compared to net sales of $4,973,976
for fiscal 2002. The sales increase is the result of favorable fluctuations in
foreign currency exchange rates between the U.S. dollar (the functional
reporting currency) and the euro and the British pound (currencies of the
Companys subsidiaries), offset by a decrease in unit sales. Excluding the
fluctuations in foreign currency exchange rates, sales decreased approximately
3%. Management believes the sales decrease in units was primarily due to
aggressive introductory market programs targeted toward the urological and
gynecological surgeons by large, competitive companies. For fiscal 2004
management believes that rationalization of patient treatment indication and
published performance of competing products will provide a favorable climate,
thus allowing the Company to broaden Macroplastique sales to our existing
customer base and expand business to new clients. In response to intensive
competitive marketing programs, new strategic marketing initiatives are being
implemented to re-invigorate the market penetration of Macroplastique.

With the sales launch of PTP Implants for the indication of fecal incontinence
to international markets outside the U.S. in 2002, Uroplasty expects
incremental sales to be derived by this new product from our expansion into the
colon and rectal surgery market and associated fecal incontinence specialties.
Fecal incontinence is a devastating condition that is reported to affect up to
16 million, or 1 out of 13 adults in the U.S. There can be no assurance,
however, the Companys efforts to increase sales and market penetration will be
successful.

Gross Profit: Gross profit was $3,743,678 and $3,517,167 for the years ended
March 31, 2003 and 2002, respectively, or 70% and 71% of net sales. Gross
profit in any one period is highly variable depending on unit sales and
utilization of manufacturing capacity.

General and Administrative Expense: General and administrative (G&A) expenses
increased 6% from $1,154,419 during fiscal 2002 to $1,220,271 during fiscal
2003. The change in G&A expense is the result of increased salaries,
contributions to the savings and retirement plans, insurance premiums, general
price increases and fluctuations in foreign currency exchange rates, partially
offset by decreased legal expenses.

Research and Development Expense: Research and Development (R&D) expenses
increased $382,725, or 23%, from $1,685,000 during fiscal 2002 to $2,067,725
during fiscal 2003. FDA regulatory costs increased from $843,077 during fiscal
2002 to $1,084,749 during fiscal 2003 and other research and development costs
increased from $841,923 during fiscal 2002 to $982,976 during fiscal 2003. The
FDA regulatory costs increase resulted from significant increases in clinical
study patient enrollment and the increase in other research and development
costs from developments of new products and further improvements of
existing product. The human clinical study costs are primarily comprised of
physician and medical fees relating to the patient procedures and follow-up
examinations, in addition to the costs of monitoring the study, maintaining and
evaluating the patient treatment, and follow-up examination data. In February
2003, the Company completed the patient enrollment phase in its multi-center
IDE clinical trial.

Selling and Marketing Expenses: Selling and marketing (S&M) costs increased
$36,194, or 3% from $1,106,640 during fiscal 2002 to $1,142,834 during fiscal
2003. Increased salaries, increased contribution expense associated with the
savings and retirement plans, general price increases and fluctuations in
foreign currency exchange rates caused the increase in S&M expenses.

Other Income (Expense): Other income (expense) includes interest income,
interest expense, foreign currency exchange gains and losses, settlement
proceeds and other non-operating costs when incurred. Other income was
$728,366 and

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$178,978 for the years ended March 31, 2003 and 2002,
respectively. Interest income was $42,497 and $19,452 for the years ended
March 31, 2003 and 2002, respectively. This increase is the result of
increased cash and cash equivalents balances. Interest expense decreased from
$25,769 for fiscal 2002 to $24,057 for fiscal 2003 as the result of decreased
long-term debt and capital lease balances, partly offset by fluctuations in
foreign currency exchange rates. Exchange gains and losses are recognized
primarily as a result of fluctuations in currency rates between the U.S. dollar
(the functional reporting currency) and the euro and British pound (currencies
of the Companys subsidiaries), as well as their effect on the dollar
denominated intercompany obligations between the Company and its foreign
subsidiaries. At March 31, 2003 and 2002, the Company had $0.4 million and
$4.0 million dollar denominated intercompany debt at its foreign Dutch
subsidiary. These intercompany balances are revolving in nature and are not
deemed to be long-term balances. The Company recognized net foreign currency
gains (losses) of $530,083 and $(14,373) for the years ended March 31, 2003 and
2002, respectively. The currency gain is primarily the result of a weakened
U.S. dollar compared to the euro and the currency loss the result of a
strengthened U.S. dollar compared to the euro. In January 2003, the Company
recapitalized one of the Dutch subsidiaries with an investment of 1.5 million
euros ($1.6 million). The proceeds from the investment were used to reduce the
dollar denominated intercompany debt at the Dutch subsidiary. This will result
in less volatility for changes in currency exchange rates in the Companys
statement of operations. The settlement income was $180,000 and $200,000 for
the years ended March 31, 2003 and 2002, respectively. The settlement income
is the proceeds from the litigation settlement as described in note 4 to the
consolidated financial statements. There will be no future income under this
settlement.

Liquidity and Capital Resources

As of March 31, 2003, the Companys cash and cash equivalent balances totaled
$3,375,981.

At March 31, 2003, the Company had working capital of approximately $4.4
million. During the year ended March 31, 2003, operating activities provided
$292,647 of cash, compared to providing $112,696 of cash in the prior-year
period. The fiscal 2003 improvement of cash provided by operations was
primarily attributable to improved earnings due to foreign currency exchange
gains of $530,083 offset by increased operating expenses of $484,771 and
$125,000 of increased working capital needs. Accounts receivable increased by
$124,125, due to the timing of payment by our customers and fluctuations in
foreign currency exchange rates. Other current assets, accounts payable,
accrued expenses fluctuated due to the timing of payments and fluctuations in
foreign currency exchange rates.

The Company currently has no financing arrangements in place with any bank for
general working capital needs, and no material unused sources of liquidity
other than the cash, equipment leasing arrangements, and its accounts
receivable and inventory balances at March 31, 2003 of $969,556 and $455,114,
respectively. For fiscal 2004, management does not anticipate any
material capital expenditure.

During the term of the fiscal 2003 Rights Offering, a total of 2,394,639 shares
of Common Stock and 798,213 Common Stock Purchase Warrants were sold to
shareholders of the Company. Net proceeds recorded in fiscal 2003 were
$2,242,969.

The Companys financial condition and results of operations could be materially
affected by fluctuations in foreign currency exchange rates and weak economic
conditions in foreign markets where the Companys products are distributed.
The effects of these conditions could include reduced unit sales and reduced
sales in dollars when converted from foreign currency amounts and material
gains and losses on transactions denominated in foreign currencies.
Furthermore, because the Companys U.S. operations are funded by sales
denominated in foreign currency, strengthening of the U.S. dollar against the
euro, and/or the British pound could have an adverse effect on the Companys
cash flow and results of operations.

Management expects continued high costs associated with the conduct of the U.S.
human clinical study for Macroplastique pursuant to the FDA approved IDE, the
subsequent U.S. Premarket Approval process, and pre-commercialization and
market launch costs in the U.S. relating to Macroplastique for female SUI.

As a result of the proceeds of the Rights Offering, management believes that
current resources and the funds generated from sale of the Companys products
outside the U.S. will be adequate to meet the Companys cash flow needs,
including R&D activities associated with existing products and markets through
fiscal 2004.

Repayments on the Companys contractual obligations, consisting of notes
payable, capital leases and operating leases, are summarized below:

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|                              |  |                        |           |        |  |           |         |           |  |         |         |  |  |  |        |       |  |  |         | 
|----------------------------- |  | ---------------------- | --------- | ------ |  | --------- | ------- | --------- |  | ------- | ------- |  |  |  | ------ | ----- |  |  | ------- | 
|                              |  | Payments due by period
|                              |  |                       
|                              |  |                        |           |        |  | Less than |         |           |  |         |         |  |  |  |        | After
|                              |  | Total                  |           | 1 year |  | 1-3 years |         | 4-5 years |  | 5 years
|                              |  |                        |           |        |  |           |         |           |  |        
|Notes payable                 |  | $                      | 500,279   |        |  |           | 37,492  |           |  |         | 112,476 |  |  |  | 71,620 |       |  |  | 278,691 | 
|Operating lease
commitments   |  |                        | 762,094   |        |  |           | 274,335 |           |  |         | 477,865 |  |  |  | 9,894  |       |  |  |        | 
|                              |  |                        |           |        |  |           |         |           |  |         |         |  |  |  |        |       |  |  |         | 
|Total contractual
obligations |  | $                      | 1,262,373 |        |  |           | 311,827 |           |  |         | 590,341 |  |  |  | 81,514 |       |  |  | 278,691 | 
|                              |  |                        |           |        |  |           |         |           |  |         |         |  |  |  |        |       |  |  |         | 

The Company is obligated to pay royalties of 5% of net sales in the U.S. of
Macroplastique products with a minimum of $50,000 per year. The duration of
this royalty agreement is through May 1, 2006. Under another royalty agreement
the Company pays royalties, in the aggregate, of three to five percent of net
sales of Macroplastique, Bioplastique, and PTP Implants subject to a monthly
minimum of $4,500. The royalties payable under this Agreement will continue
until the patent referenced in the Agreement expires in 2010. Under a license
agreement for the Macroplastique Implantation System the Company pays a royalty
of 10 British pounds for each unit sold during the life of the patent.
Royalties are more fully described under Patents, Trademarks, and Licenses.

New Accounting Pronouncements

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure  an amendment of FASB Statement No.
123. This statement provides alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based compensation. The
statement amends the disclosure requirements of FASB Statement No. 123 to
require prominent disclosure in both annual and interim financial statements
about the method of accounting for stock-based compensation and the effect of
the method used on reported results. The
Company accounts for stock-based compensation arrangements in accordance with
the provisions of Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and complies with the disclosure provisions of FASB
Statement No. 123. The transition provisions are effective for fiscal years
ending after December 15, 2002. The disclosure provisions are effective for
interim periods beginning after December 15, 2002. The Company implemented the
required disclosure provisions in the Form 10-KSB for the period ended March
31, 2003.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging, which amends and clarifies financial
accounting and reporting for derivative instruments. The Company is required
to adopt this statement for transactions occurring after June 2003 and is
currently analyzing the impact of its adoption on the Companys financial
statements.




ITEM 6.a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from foreign exchange rate fluctuations
of the euro and the British pound to the U.S. dollar as the financial position
and operating results of the Companys subsidiaries are translated into U.S.
dollars for consolidation. The Companys exposure to foreign exchange rate
fluctuations also arises from transferring funds from the Dutch subsidiary to
the U.S. parent and from transferring funds between the Dutch subsidiary and
the U.K. subsidiary.

At March 31, 2003 and 2002, the Company had $0.4 million and $4.0 million
dollar denominated intercompany debt at its foreign Dutch subsidiary. These
intercompany balances are revolving in nature and are not deemed to be
long-term balances. The Company recognized net foreign currency gains (losses)
of $530,083 and $(14,373) for the years ended March 31, 2003 and 2002,
respectively. The currency gain is primarily the result of a weakened U.S.
dollar compared to the euro and the currency loss the result of a strengthened
U.S. dollar compared to the euro. In January 2003 the Company recapitalized one
of the Dutch subsidiaries with an investment of 1.5 million euros ($1.6
million). The proceeds from the investment were used to reduce the dollar
denominated intercompany debt at the Dutch subsidiary. This will result in less
volatility for changes in currency exchange rates in the Companys statement of
operations.

The Company has outstanding borrowings under a bank mortgage loan which bears
interest at a fluctuating rate tied to the banks base rate. The Company does
not use derivative financial instruments to manage interest rate risk. The
outstanding balance at March 31, 2003 under the bank mortgage loan was
$469,075. Given the above, the Companys exposure to interest rate risk on
borrowings is not believed to be material. All other existing debt agreements
of the Company bear interest at fixed rates, and are therefore not subject to
exposure from fluctuating interest rates.

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ITEM 7. FINANCIAL STATEMENTS

The information contained under the headings Consolidated Statements of
Operations, Consolidated Balance Sheets, Consolidated Statements of
Shareholders Equity and Comprehensive Income (Loss), Consolidated Statements
of Cash Flows, Notes to Consolidated Financial Statements and Independent
Auditors Report is incorporated herein by reference.




ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.




PART III




ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The Companys Directors and Executive Officers are as follows:

|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|-------------------- |  | --- | -- | -------- |  | ------------------------------------------------------------------ |  | -------- | ---- | ---- |  |  | ---- | 
|                     |  |     |    |          |  |                                                                    |  | Director |      | Term
|Name                 |  | Age |    | Position |  | Since                                                              |  | expires 
|Daniel G. Holman     |  |     | 57 |          |  | Chairman, President, CEO, CFO                                      |  |          | 1994 |      |  |  | 2003 | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Joel R. Pitlor       |  |     | 64 |          |  | Director                                                           |  |          | 1994 |      |  |  | 2004 | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|R. Patrick Maxwell   |  |     | 58 |          |  | Director                                                           |  |          | 1994 |      |  |  | 2005 | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Thomas E. Jamison    |  |     | 43 |          |  | Director                                                           |  |          | 2000 |      |  |  | 2004 | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Sam B. Humphries     |  |     | 61 |          |  | Director                                                           |  |          | 2003 |      |  |  | 2003 | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Susan Hartjes Holman |  |     | 49 |          |  | COO, Secretary                                                     |  |          |      |      |  |  |      | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Larry Heinemann      |  |     | 50 |          |  | Vice President Marketing & Corporate Development                   |  |          |      |      |  |  |      | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Christopher Harris   |  |     | 44 |          |  | Vice President International Sales
Managing Director UK subsidiary |  |          |      |      |  |  |      | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Arie J. Koole        |  |     | 39 |          |  | Controller
Managing Director Dutch subsidiaries                    |  |          |      |      |  |  |      | 
|                     |  |     |    |          |  |                                                                    |  |          |      |      |  |  |      | 
|Marc M. Herregraven  |  |     | 38 |          |  | Vice President of Manufacturing                                    |  |          |      |      |  |  |      | 

All Directors except Mr. Humphries are members of the Nominating Committee; all
Directors except Mr. Holman and Mr. Humphries are members of the Compensation
Committee; Mr. Maxwell and Mr. Jamison are members of the Audit Committee. The
Company expects that Mr. Humphries will be appointed as a member of the
Nominating Committee and the Compensation Committee.

The Company has entered into Employment Agreements, which are terminable at
will by either party upon thirty day written notice, with Mr. Holman, Ms.
Holman, Mr. Heinemann, Mr. Harris and Mr. Herregraven, the terms of which,
among other things, specify a base salary subject to annual adjustment by
mutual agreement of the Company and the Employee, and a severance payment to
the employee upon employment termination without cause. The initial salaries,
which can be increased annually at the discretion of the Board, were $180,200,
$121,000, $78,000, $74,000 and $98,262, respectively. Any severance amounts
payable under the Agreement shall be limited to the Employees base salary for
not

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less than four months and not longer than twelve months after employment
termination, depending on the Employees years of service. Contemporaneously
with the execution of the Employment Agreement, each of the Officers executed
an Employee Confidentiality, Inventions, Non-Solicitation, and Non-Compete
Agreement, certain terms of which specify the Employee shall not disclose
confidential information, shall assign to the Company without charge all
intellectual property relating to the Companys business which is created or
conceived during the term of employment, shall not encourage Employees to leave
the employment of the Company for any reason and shall not compete with the
Company during the term of employment and for a
period of eighteen months thereafter. Also in connection with the execution of
these Agreements, each of these Officers, other than Mr. Herregraven, were
granted varying amounts of stock options to purchase the Companys Common Stock
at the fair market value at date of grant of $7.50 per share. In all cases, the
options are exercisable for five years or until one year after employment
termination (subject to certain termination provisions), whichever date is
earlier, and vest in three equal amounts on each one-year anniversary date
subsequent to the option grant date.

The following paragraphs describe the business experience of each of the
Companys Directors and Officers.

Daniel G. Holman: Mr. Holman has served as Chairman of the Board, President
and Chief Executive Officer of Uroplasty, Inc. since February 1994, as Chief
Financial Officer from June 1996 to November 1999 and as Chief Financial
Officer as of February 2001. He was Executive Vice President of Bioplasty,
Inc. from 1973 to 1985, its President from 1985 to 1987, and Secretary from
1986 to March 1992. Mr. Holman was Chairman of the Board of Bioplasty, Inc.
from March 1992, and President and CEO from February 22, 1993 to December 31,
2001. He served as Chairman of the Board and Chief Executive Officer of
Bio-Vascular, Inc. from June 1988 to September 1991, served as a Director of
Genetic Laboratories Wound Care, Inc. from February 1988 until July 1993, and
as Vice President from February 1988 through November 1992. Mr. Holman holds a
Bachelor of Arts degree in Biology from St. Cloud State University.

Joel R. Pitlor: Mr. Pitlor has been a director since February 1994. He served
as a Director of Bioplasty, Inc. from January 1989 until May 1996. For over
sixteen years, he has been the owner and manager of a management consulting
firm. Mr. Pitlor is presently a Director of Precision Optics Corporation,
which is publicly held. Mr. Pitlor holds a Bachelor of Science degree from MIT
and serves as Personal Advisor to several CEOs.

R. Patrick Maxwell: Mr. Maxwell was appointed a Director of Uroplasty, Inc. in
April 1994 and elected by the shareholders in August 1997. Mr. Maxwell has
over 30 years of experience as a turn around management specialist, an
entrepreneur and executive in both the business and non-profit sectors. Mr.
Maxwell is Cofounder and a Director of Telnet Services Limited of Auckland, New
Zealand since September 1995, Cofounder and Chief Financial Officer of Tele
Resources, Inc. since October 1996 and Chief Financial Officer of American
Specialty Confections since April 2000. Mr. Maxwell has served on numerous
Boards of Directors of both business and charitable organizations. He has a
B.A. in philosophy from St. Johns University and a Juris Doctor from
Northwestern University School of Law.

Thomas E. Jamison: Mr. Jamison was elected a Director of Uroplasty, Inc. in
August 2000. Mr. Jamison is an attorney with the business litigation law firm
of Fruth, Jamison & Elsass, P.A. in Minneapolis. From 1996 to 1999, Mr. Jamison
served as an investment banker in the Corporate Finance Department of R.J.
Steichen & Co. From 1991 to 1996, Mr. Jamison practiced law at Fruth & Anthony,
P.A. in Minneapolis. Mr. Jamison graduated magna cum laude from William
Mitchell College of Law in 1991.

Sam B. Humphries: Mr. Humphries was elected a Director of Uroplasty, Inc. in
April 2003. Mr. Humphries also serves as a consultant to the CEO. Mr.
Humphries is currently the Managing Director of the Ascent Medical Technology
Fund, L.P. and has more than 25 years of healthcare and medical device industry
experience. Previously, Mr. Humphries was the President and CEO of American
Medical Systems and earlier served as its Vice President of World Wide Sales
and Marketing during its formative years. Mr. Humphries also served as
President and CEO of Optical Sensors, Inc., a medical start-up company, where
he guided the company from start-up through its initial public offering. Mr.
Humphries has served on numerous private and public Boards of Directors,
including the Board of Directors of the Health Industry Manufacturers
Association (HIMA, now AdvaMed). Currently he serves on the Board of Directors
of LifeSpex Medical, Inc., UroMetrics Medical, Inc., Micropure Medical, Inc.,
Inlet Medical, Inc., Universal Hospital Services, Inc., Ascent Private Equity,
L.L.C., and Ascent Medical Technology Fund, L.P.

Susan Hartjes Holman: Ms. Holman joined Bioplasty, Inc. in September 1991 as
Director of Operations and served as Vice President of Operations and
Regulatory Affairs from April 1993 until May 1996. In
November 1994, she was appointed Vice-President of Operations and Regulatory
Affairs for Uroplasty, Inc. and was elected Secretary in September 1996. In
November 2002, she was appointed Chief Operating Officer. Prior to 1991, Ms.
Holman was Director of Operations at Bio-Vascular, Inc. in St. Paul, Minnesota
from November 1989 to September 1991. Prior to that time, she served at
various other pharmaceutical and medical device companies in management
positions in manufacturing, quality assurance, and research. Ms. Holman has
Bachelor of Arts degrees in Biology-Microbiology and Biomedical Science from
St. Cloud State University, and has done graduate work in the biological
sciences. Ms. Holman

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is a Senior Member and a Certified Quality Auditor of the
American Society for Quality (ASQ), has served several years on its Executive
Committee and subcommittees, and is a member of the Regulatory Affairs
Professionals Society (RAPS) and the Henrici Society for Microbiologists. She
has served on several national and international scientific and regulatory
committees, and is a cofounder for the Biomedical Focus Conference and the
Biomedical Consortium, Minneapolis, MN.

Larry Heinemann: Mr. Heinemann joined Uroplasty, Inc. in September 1998 as
Director of Sales for North and South America. In July 1999 he was promoted to
Vice President of Sales and Marketing for Uroplasty, Inc. In August 2001 he
was appointed as Vice President Marketing & Corporate Development. Prior to
joining Uroplasty, Inc., Mr. Heinemann worked for two divisions of C. R. Bard,
Inc. From January 1996 to September 1998, he was employed by the Bard Medical
Division in the positions of Territory Manager and Sales Training. From May
1987 to January 1996, Mr. Heinemann was employed by the Bard Urological
Division in various positions of Sales Consulting and Training Management.
Prior to that time, Mr. Heinemann was employed by surgical device divisions of
Squibb and Sterling Drug in various sales management positions. Mr. Heinemann
holds a Bachelor of Science Degree from the School of Business of Eastern
Illinois University and majored in Marketing and Personnel Management. He is a
member of SUNA (Society of Urological Nursing Association), and has been
serving on the Board as an Industry Liaison for the Upper Midwest Chapter since
1991.

Christopher Harris: Mr. Harris joined Bioplasty Ltd. in October 1989 as Area
Sales Manager in the United Kingdom. Since September 1994, he has been the
Managing Director of the Companys subsidiary, Uroplasty LTD., in the United
Kingdom. In February 1996, Mr. Harris was appointed as Director of Corporate
Development and in January 1997 he was appointed Vice President of Corporate
Development. In August 2001 he was appointed Vice President International
Sales. Mr. Harris, a certified nurse in the United Kingdom, practiced general
surgery nursing for two years and operating room nursing for nine years prior
to 1989. Mr. Harris is a member of the Institute of Directors (MinstD) in the
United Kingdom.

Arie J. Koole: Mr. Koole joined Bioplasty B.V. in May 1993 as Financial
Manager in The Netherlands. Since January 2000 he has been the Managing
Director of the Companys subsidiaries in The Netherlands. In June 1996, Mr.
Koole was appointed as Director of Finance and in January 2000, Mr. Koole was
appointed as Controller. From 1987 to 1993, Mr. Koole was a financial auditor
with the international accounting firm Deloitte & Touche in The Netherlands.
Mr. Koole has a bachelor degree in Business Economics.

Marc M. Herregraven: Mr. Herregraven joined Bioplasty, Inc. in April 1992 as
Plant Manager, became Director of Manufacturing in 1994, and Director of
Operations in 1999. In November 2002, Mr. Herregraven was appointed as Vice
President of Manufacturing. Previously he served with Advanced Bio-Surfaces,
Inc., a Minnesota-based medical device developer as Director of Manufacturing,
and with Bio-Vascular, Inc., a Minnesota-based medical device manufacturer in
an engineering function. Mr. Herregraven has a Bachelor of Science degree in
Mechanical Engineering and has been a member of the American Society for
Quality (ASQ) since 1996.

Mr. Holman and Ms. Hartjes Holman became husband and wife in June 1999.




ITEM 10. EXECUTIVE COMPENSATION

The information contained under the heading Executive Compensation in the
Proxy Statement is incorporated herein by reference.




ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the heading Principal Shareholders in the
Proxy Statement is incorporated herein by reference.




ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the heading Certain Transactions in the Proxy
Statement is incorporated herein by reference.




ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. incorporated by reference.

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|       |  |                                                                                                                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                                                
|2.1    |  | First Amended Joint Plan of Reorganization (Modified) of the
Company dated January 31, 1994 (Filed as Exhibit 8.1 to Form 10SB)                                                                                                            
|       |  |                                                                                                                                                                                                                                            
|3.1    |  | Articles of Incorporation of Uroplasty, Inc. (Filed as Exhibit 2.1
to Form 10SB)                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                            
|3.2    |  | Bylaws of Uroplasty, Inc. (Filed as Exhibit 2.2 to Form 10SB)                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                            
|4.1    |  | Form of Stock Certificate of the Company representing shares of the
Companys Common Stock (Filed as Exhibit 3.1 to Form 10SB)                                                                                                             
|       |  |                                                                                                                                                                                                                                            
|10.1   |  | Settlement Agreement and Release dated November 30, 1993 by and
between Bioplasty, Inc., Bio-Manufacturing, Inc., Uroplasty, Inc.,
Arthur A. Beisang, Arthur A. Beisang III, MD and Robert A. Ersek,
MD (Filed as Exhibit 6.1 to Form 10SB)
|       |  |                                                                                                                                                                                                                                            
|10.2   |  | Purchase and Sale Agreement dated December 1, 1995 by and among
Bio-Vascular, Inc., Bioplasty, Inc., and Uroplasty, Inc. (Filed as
Exhibit 6.2 to Form 10SB)                                                                               
|       |  |                                                                                                                                                                                                                                            
|10.3   |  | License Agreement dated December 1, 1995 by and between
Bio-Vascular, Inc. and Uroplasty, Inc. (Filed as Exhibit 6.3 to
Form 10SB)                                                                                                         
|       |  |                                                                                                                                                                                                                                            
|10.4   |  | Lease Agreement dated January 10, 1995 between Summer Business
Center Partnership and Uroplasty, Inc. (Filed as Exhibit 6.4 to
Form 10SB)                                                                                                  
|       |  |                                                                                                                                                                                                                                            
|10.5   |  | Unsecured $640,000 Promissory Note dated March 30, 1994 by and
between Bioplasty, Inc., Uroplasty, Inc. and Bioplasty Product
Claimants Trust (Filed as Exhibit 6.5 to Form 10SB)                                                         
|       |  |                                                                                                                                                                                                                                            
|10.6   |  | Agreement and Satisfaction dated January 30, 1995 by and between
Bioplasty Product Claimants Trust and Bioplasty, Inc. (Filed as
Exhibit 6.6 to Form 10SB)                                                                                
|       |  |                                                                                                                                                                                                                                            
|10.7   |  | Asset Sale and Satisfaction of Debt Agreement dated June 23, 1995
by and between Bioplasty, Inc. and Uroplasty, Inc. (Filed as
Exhibit 6.7 to Form 10SB)                                                                                   
|       |  |                                                                                                                                                                                                                                            
|10.8   |  | Executory Contract Assumption Stipulation dated December 28, 1993
by and between Bioplasty, Inc., Uroplasty, Inc., and Collagen
Corporation (Filed as Exhibit 6.8 to Form 10SB)                                                            
|       |  |                                                                                                                                                                                                                                            
|10.9   |  | Settlement and License Agreement dated July 23, 1992 by and between
Collagen Corporation, Bioplasty, Inc., and Uroplasty, Inc. (Filed
as Exhibit 6.9 to Form 10SB)                                                                         
|       |  |                                                                                                                                                                                                                                            
|10.10  |  | Employment Agreement between Uroplasty, Inc. and Daniel G. Holman
dated December 7, 1999. (Filed as Exhibit 10.10 to Form
10-KSB/03-31-2000.)                                                                                              
|       |  |                                                                                                                                                                                                                                            
|10.11  |  | Employment Agreement between Uroplasty, Inc. and Christopher Harris
dated December 7, 1999. (Filed as Exhibit 10.11 to Form
10-KSB/03-31-2000.)                                                                                            
|       |  |                                                                                                                                                                                                                                            
|10.12  |  | Employment Agreement between Uroplasty, Inc. and Susan Holman dated
December 7, 1999. (Filed as Exhibit 10.13 to Form
10-KSB/03-31-2000.)                                                                                                  
|       |  |                                                                                                                                                                                                                                            
|10.13  |  | Employment Agreement between Uroplasty, Inc. and Larry Heinemann
dated December 7, 1999. (Filed as Exhibit 10.14 to Form
10-KSB/03-31-2000.)                                                                                               
|       |  |                                                                                                                                                                                                                                            
|10.14  |  | Agreement, dated October 14, 1998, by and between Uroplasty, Inc.
and Samir M. Henalla (pertaining to Macroplastique Implantation
System). (Filed as Exhibit 10.15 to Form 10-KSB/A /03-31-2001)                                           

(b)  The following exhibits are filed as part of this report:

|       |  |                                                                                                 
|------ |  | ------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                     
|10.15  |  | Employment Agreement between Uroplasty, Inc. and Mr. Marc
Herregraven dated November 15, 2002.  
|       |  |                                                                                                 
|10.16  |  | Consulting Agreement between Uroplasty, Inc. and Executive Advisory
Group dated April 1, 2003.  
|       |  |                                                                                                 
|10.17  |  | Stock Option Agreement between Uroplasty, Inc. and Executive
Advisory Group dated April 1, 2003.
|       |  |                                                                                                 

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|       |  |                                                                                         
|------ |  | ----------------------------------------------------------------------------------------
|Number |  | Description                                                                             
|10.18  |  | Consulting Agreement between Uroplasty, Inc. and C.C.R.I
Corporation dated April 1, 2003
|       |  |                                                                                         
|13.0   |  | Financial Statements                                                                    
|       |  |                                                                                         
|21.0   |  | Subsidiaries of the Company                                                             
|       |  |                                                                                         
|99.1   |  | Certifications by the CEO and Controller                                                

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ITEM 14. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures. Within the 90 days prior to the date of
this report, Daniel G. Holman, our President, Chief Executive Officer, Chief
Financial Officer and Arie J. Koole, our Controller, Principal Accounting
Officer, carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Rule 13a-15b
under the Securities Exchange Act of 1934. Based on their review of our
disclosure controls and procedures, such Officers have concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to us that is required to be included in our
periodic SEC filings.

Internal Controls and Procedures. There were no significant changes in
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Company caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                    |  |                                                                                                                                                                                            
|------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dated: May 20, 2003 |  | UROPLASTY, INC.
By: /s/ DANIEL G. HOLMAN
Daniel G. Holman
President, Chief Executive Officer,
Chief Financial Officer (Principal Financial Officer),
Director (Principal Executive Officer)

In accordance with the Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the Company and in the capacities and on
the dates indicated.

|                                          |  |                                                                                                                  |  |             
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ------------
|Name                                      |  | Title / Capacity                                                                                                 |  | Date        
|                                         
|/s/ DANIEL G. HOLMAN
Daniel G. Holman     |  | President, Chief Executive Officer
Chief Financial Officer,
Director (Principal Executive and
Financial Officer) |  | May 20, 2003
|                                         
|/s/ ARIE J. KOOLE
Arie J. Koole           |  | Controller
(Principal Accounting Officer)                                                                        |  | May 20, 2003
|                                         
|/s/ JOEL R. PITLOR
Joel R. Pitlor         |  | Director                                                                                                         |  | May 20, 2003
|                                         
|/s/ R. PATRICK MAXWELL
R. Patrick Maxwell |  | Director                                                                                                         |  | May 20, 2003
|                                         
|/s/ THOMAS E. JAMISON
Thomas E. Jamison   |  | Director                                                                                                         |  | May 20, 2003
|                                         
|/s/ SAM B. HUMPHRIES
Sam B. Humphries     |  | Director                                                                                                         |  | May 20, 2003

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CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel G. Holman, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Uroplasty, Inc. (the
Registrant);

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.     The Registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

(a)  designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

(b)  evaluated the effectiveness of the Registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

(c)  presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The Registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrants auditors and the audit committee of
Registrants Board of Directors (or persons performing the equivalent
function):

(a)  all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrants ability to record,
process, summarize and report financial data and have identified for the
Registrants auditors any material weaknesses in internal controls; and

(b)  any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrants internal controls;
and

6.     The Registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                    |  |    |                                                                                                                                           
|------------------- |  | -- | ------------------------------------------------------------------------------------------------------------------------------------------
|Date: May 20, 2003. |  |    |                                                                                                                                           
|                    |  | By | /s/ DANIEL G. HOLMAN

Daniel G. Holman, President, Chief Executive Officer and
      Chief Financial Officer (Principal Financial Officer)

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CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Arie J. Koole, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Uroplasty, Inc. (the
Registrant);

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.     The Registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

(a)  designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

(b)  evaluated the effectiveness of the Registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

(c)  presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The Registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrants auditors and the audit committee of
Registrants Board of Directors (or persons performing the equivalent
function):

(a)  all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrants ability to record,
process, summarize and report financial data and have identified for the
Registrants auditors any material weaknesses in internal controls; and

(b)  any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrants internal controls;
and

6.     The Registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                    |  |    |                                                                             
|------------------- |  | -- | ----------------------------------------------------------------------------
|Date: May 20, 2003. |  |    |                                                                             
|                    |  | By | /s/ ARIE J. KOOLE


Arie J. Koole, Controller (Principal Accounting Officer)

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