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Ahlcon Parenterals (India) Ltd. Accounting Policies | Accounting Policy of Ahlcon Parenterals (India) Ltd.
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Accounting Policies of Ahlcon Parenterals (India) Ltd. Company

Mar 31, 2015

A. Basis of Accounting

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (accounts) rules, 2014. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which revaluation is carried out. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c. Useful lives/ depreciation rates

Till the year ended March 31st, 2014, depreciation rates prescribed under Schedule XIV were treated as minimum rates and the company was not allowed to charge depreciation at lower rates even if such lower rates were justified by the estimated useful life of the asset. Schedule II to the Companies Act 2013 prescribes useful lives for fixed assets which, in many cases, are different from lives prescribed under the erstwhile Schedule XIV. However, Schedule II allows companies to use higher/ lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements.

Considering the applicability of Schedule II, the management has re- estimated useful lives and residual values of all its fixed assets. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets, though these rates in certain cases are different from lives prescribed under Schedule II. Hence, this change in accounting policy did not have any material impact on financial statements of the company.

d. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.

Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.

In accordance with AS 9 on 'Disclosure of Revenue from Sales Transactions' issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in Profit & Loss Account.

Export Benefit

Export Benefits constituting import duty benefits under Duty Draw Back & Focus Market are accounted for on accrual basis. Export benefits under Duty Draw Back & Focus Market are considered as other operating income.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Policy for Insurance Claims

Claims receivable on account of insurance are accounted for to the extent the Company is reasonably certain of their ultimate collection.

e. Tangible fixed Assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure directly relating to construction activity is capitalized (net of income, if any). Indirect expenditure specifically attributable to construction of a project or to the acquisition of the fixed assets or bringing it to working condition is capitalised as part of Construction project or as a part of Fixed assets. Other indirect expenditure incurred during the construction period which is not related to construction activity nor is incidental thereto is charged to Statement of profit and loss.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit and loss when the asset is derecognized.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are changed to the Statement of profit and loss for the period during which such expenses are incurred.

f. Depreciation

I. Depreciation on fixed assets is provided using Straight Line

Method on prorata basis at the rates and manners prescribed in schedule II of companies act 2013 except for the plant & Machinery. The depreciation on plant & Machinery has been provided based on the useful life estimated by the management. The company has used the following rates of depreciation on plant & Machinery using straight line method.

Useful lives estimated by the management for plant and machinery* 19 years

* For these class of assets, based on internal technical assessment, the management believes that the useful life as given above best represents the period over which management expects to use the assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under part C of Schedule II of the Companies Act 2013. The life of plant and machinery is based on triple shift working.

ii. Leasehold land is amortized over the period of lease.

iii. Fixed assets costing below Rs. 5000/- are depreciated at the rate of 100%.

iv. Depreciation on the amount of additions made to fixed assets due to up gradations/improvements is provided over the remaining useful life of the asset to which it relates.

v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

vi. Effective from April 01st, 2014, the company has charged depreciation based on the revised remaining useful life of the assets as per the requirement of schedule II of the Companies Act 2013. Due to the above, depreciation charged for the year ended March 31st, 2015 is higher by Rs. 44,65,151/-. Further based on transitional provisions provided in note 7(b) of schedule II of the companies Act 2013, an amount of Rs. 73,87,578/- (net of deferred tax) has been adjusted with the retained earnings.

g. Intangibles

Software costs relating to acquisition of initial software license fee and installation costs are capitalized in the year of purchase. Software's are amortized on a straight-line basis over its useful life, which is considered not exceeding 10 years.

h. Borrowing Cost

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

i. Inventories

Inventories are valued as follows :

Finished goods and Work in Progress :

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on moving weighted average basis.

Scrap : Net Realisable value

Raw Material, Stores and Spare and others :

Lower of cost and net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products, in which they will be incorporated, are expected to be sold at or above cost. Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average.

j. Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non- monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise .

In terms of the Notification No. G.S.R. 225(E) dated 31.03.2009 as amended till date issued by the Ministry of Corporate Affairs on Accounting Standard (AS-11) Para 46A read with clarification issued by the Ministry of Corporate Affairs vide Circular No.25/2012 dated August 09, 2012 on AS-11 relating to "the effects of changes in Foreign Exchange Rates", the Company has exercised option to adjust the foreign exchange difference on long term foreign currency loans to the cost of qualifying capital assets. Exchange differences has also been treated as per Clause 4(e) of AS-16 on "Borrowing Cost".

Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Statement of profit and loss in the year in which the exchange rates change. However for the exchange differences arising on long term foreign currency monetary item relating to the acquisition of fixed assets are adjusted with the cost of the qualifying capital assets.

k. Leases

Operating Leases: Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of profit and loss on a straight-line basis over the lease term.

l. Income Taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation and carry forward of tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

m. Impairment of Assets

i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to asset.

ii) After impairment, depreciation is provided on the revised carrying amount of the asset over the remaining useful life.

n. Research & Development

Revenue expenditure on research and development is recognised as expense in the year in which it is incurred.

Capital expenditure on research and development is shown as addition to fixed assets.

o. Retirement and other Employee Benefits

Retirement benefits in the form of Provident Fund (where contributed to the Regional Provident Fund Commissioner) and employee state insurance are defined contribution schemes. The Company has no obligation, other than the contribution payable to the respective authorities. The Company recognizes contribution payable to respective authorities as an expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment or a cash refund.

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

Actuarial gains/losses are immediately taken to Statement of profit and loss and are not deferred.

p. Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates..

q. Segment Reporting

Identification of segments:

Secondary Segment

Geographical Segment

The activities of the Company relate to single segement i.e. pharmaceuticals business segment and has only one reportable segment. However, the analysis of Company's revenue generation is based on the geographical location of its customer's and does not have any identifiable 'Primary Segment' for reporting.

Accordingly, the geographical location segment have been considered for disclosure as follows:

For Sales Revenue ;

- Sales with in india includes Sales to customers located with in india.

- Sales outside india includes Sales to customers located outside india.

For Carrying Amount of Geographical Segment Assets (i.e. receivables);

Carrying amount (receivables) of Geographical segmented assets are as follows:

- Receivables within India

- Receivables outside India

For Common Fixed Assets;

The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.

r. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

s. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

t Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2014

A. Basis of Accounting

i The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006,(as amended) and the relevant provisions of the Companies Act,1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

ii Gratuity and Leave encashment liability is accounted for on accrual basis as per the Acturial Valuation determined , at the end of accounting year.

iii Cenvat benefit on the Raw Material stocks is accounted for on the basis of production plan for excisable and non - excisable products.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.

Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.

In accordance with AS 9 on ''Disclosure of Revenue from Sales Transactions'' issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in Profit & Loss Account.

Export Benefit

Export Benefits constituting import duty benefits under Duty Draw Back & Focus Market are accounted for on accrual basis. Export benefitsunder Duty Draw Back & Focus Market are considered as other operating income.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Policy for Insurance Claims

Claims receivable on account of insurance are accounted for to the extent the Company is reasonably certain of their ultimate collection.

d. Tangible fixed Assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure directly relating to construction activity is capitalized (net of income, if any). Indirect expenditure specifically attributable to construction of a project or to the acquisition of the fixed assets or bringing it to working condition is capitalised as part of Construction project or as a part of Fixed assets. Other indirect expenditure incurred during the construction period which is not related to construction activity nor is incidental thereto is charged to Statement of profit and loss.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit and loss when the asset is derecognized.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are changed to the Statement of profit and loss for the period during which such expenses are incurred.

e. Depreciation

i. Depreciation on all completed Fixed Assets is provided on the Straight Line Method in accordance with the Schedule XIV of Companies Act, 1956.

ii. Leasehold land is amortized over the period of lease.

iii. Improvement in Building is written off in three equal annual installments.

iv. Telephones is written off in three equal annual installments.

v. Fixed assets costing below Rs.5000 are depreciated at the rate of 100%.

vi. Depreciation on the amount of additions made to fixed assets due to up gradations / improvements is provided over the remaining useful life of the asset to which it relates.

vii. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

f. Intangibles

Software costs relating to acquisition of initial software license fee and installation costs are capitalized in the year of purchase. Software''s are amortized on a straight-line basis over its useful life, which is considered not exceeding 10 years.

g. Borrowing Cost

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

h. Inventories Inventories are valued as follows :

Finished goods and Work in Progress :

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on moving weighted average basis.

Scrap: Net Realisable value

Raw Material, Stores and Spare and others :

Lower of cost and net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products, in which they will be incorporated, are expected to be sold at or above cost. Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average.

I. Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences are recognized as income or as expenses in the period in which they arise.

Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

j. Leases

Operating Leases: Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of profit and loss on a straight-line basis over the lease term.

k. Income Taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation and carry forward of tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

l. Impairment of Assets

i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to asset.

ii) After impairment, depreciation is provided on the revised carrying amount of the asset over the remaining useful life.

m. Research & Development

Revenue expenditure on research and development is recognised as expense in the year in which it is incurred.

Capital expenditure on research and development is shown as addition to fixed assets.

n. Retirement and other Employee Benefits

Retirement benefits in the form of Provident Fund (where contributed to the Regional Provident Fund Commissioner) and employee state insurance are defined contribution schemes. The Company has no obligation, other than the contribution payable to the respective authorities. The Company recognizes contribution payable to respective authorities as an expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment or a cash refund.

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

Actuarial gains/losses are immediately taken to Statement of profit and loss and are not deferred.

o. Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates..

p. Segment Reporting

Identification of segments:

Secondary Segment

Geographical Segment

The activities of the Company relate to single segement i.e. pharmaceuticals business segment and has only one reportable segment. However, the analysis of Company''s revenue generation is based on the geographical location of its customer''s and does not have any identifiable ''Primary Segment'' for reporting.

Accordingly, the geographical location segment have been considered for disclosure as follows:

For Sales Revenue

* Sales with in india includes Sales to customers located with in india.

* Sales outside india includes Sales to customers located outside india.

For Carrying Amount of Geographical Segment Assets (i.e. receivables)

Carrying amount (receivables) of Geographical segmented assets are as follows:

* Receivables within India

* Receivables outside India

For Common Fixed Assets

The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.

q. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

r. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

s. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2013

A. Basis of Accounting

i The Accounts of the Company are prepared under the historical cost convention. For recognition of Income and Expenses, accrual basis of accounting is followed except for claims not accepted / acknowledged, which are accounted for on cash basis on account of uncertainties.

ii Gratuity and Leave encashment liability is accounted for on accrual basis as per the Acturial Valuation determined , at the end of accounting year.

iii Cenvat benefit on the Raw Material stocks is accounted for on the basis of production plan for excisable and non – excisable products.

b. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.

Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.

In accordance with AS 9 on ''Disclosure of Revenue from Sales Transactions'' issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in Profit & Loss Account.

Export Benefit

Export Benefits constituting import duty benefits under Duty Draw Back & Focus Market are accounted for on accrual basis.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

c. Fixed Assets

Fixed Assets have been shown at cost of acquisition, comprising of purchase price (net of rebates and discounts) levies and any other directly attributable cost and indirect expenditure for bringing the asset to its working condition for the intended use less accumulated depreciation.

d. Depreciation

i. Depreciation on all completed Fixed Assets is provided on the Straight Line Method in accordance with the Schedule XIV of Companies Act, 1956.

ii. Leasehold land is amortized over the period of lease.

iii. Software costs relating to acquisition and development are capitalized in the year of purchase and amortized on a straight– line basis over its useful life not exceeding 10 years.

iv. Improvement in Building is written off in three equal annual installments.

v. Telephones is written off in three equal annual installments.

e. Borrowing Cost

Borrowing costs specifically relatable to acquisition of fixed assets are capitalized as part of the cost of fixed assets. Other borrowing costs are charged to revenue.

f. Inventories

Inventories are valued as follows :

Finished goods and : Lower of cost and

Work in Progress net realizable value.

Scrap : Net Realisable value

Raw Material, Stores and : Lower of cost and net realizable value.

Spare and others However materials and other items

held for use in the production of inventories are not written down below cost if the finished

products, in which they will be incorporated, are expected to be sold at or above cost. Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average.

h. Foreign Currency Transactions

The monetary items of foreign currency transactions (not covered under forward contracts) are converted into Indian Rupees at the exchange rates prevailing on the date of Balance Sheet. The Exchange difference on such conversion is adjusted in Income/Expenditure. Foreign Currency transactions are recognized at the exchange rate prevailing at the time of transaction.

In respect of Forward Exchange Contract entered into by the Company, the difference between the contracted rate and the rate at the date of

transaction is recognized as gain or loss over the period of contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.

i. Current Tax is being provided as per the prevailing provisions of Income Tax Act, 1961.

j. Deferred Taxation

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the substantively enacted rate of tax on the Balance Sheet date, to the extent that the timing differences are expected to crystallize / capable of reversal as deferred tax charge / benefit in the Profit and Loss Account and as deferred tax liability / asset in the Balance Sheet.

k. Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of the impairment / loss of the fixed assets. If any indication exists, an asset recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

l. Retirement and other Employee Benefits

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

Retirement benefits in the form of Provident Fund (where contributed to the Regional PF Commissioner) is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.

Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

Actuarial gains/losses are immediately taken to Profit and Loss account and are not deferred.

m. Segment Reporting

The activities of the Company relate to single segment i.e. pharmaceuticals business segment and has only one reportable segment. However, the analysis of Company''s revenue generation is based on the geographical location of its customer''s and does not have any identifiable ''Primary Segment'' for reporting.

Accordingly, the geographical location segment have been considered for disclosure as follows:

For Sales Revenue ;

Sales revenue with in india includes Sales to customers with in india. Sales revenue outside india includes Sales to customers located outside india.

For Carrying Amount of Geographical Segment Assets (i.e. receivables);

Carrying amount (receivables) of Geographical segmented assets are as follows:

- Receivables within India

- Receivables outside India

For Common Fixed Assets;

The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.


Mar 31, 2012

A. Basis of Accounting

i The Accounts of the Company are prepared under the historical cost convention. For recognition of Income and Expenses, accrual basis of accounting is followed except for claims not accepted / acknowledged, which are accounted for on cash basis on account of uncertainties.

ii Gratuity and Leave encashment liability is accounted for on accrual basis as per the Acturial Valuation determined, at the end of accounting year.

iii Cenvat benefit on the Raw Material stocks is accounted for on the basis of production plan for excisable and non - excisable products.

b. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.

Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.

Export Benefit

Export Benefits constituting import duty benefits under Duty Exemption Pass Book (DEPB) / Duty Draw Back are accounted for on accrual basis.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

c. Fixed Assets

Fixed Assets have been shown at cost of acquisition, comprising of purchase price (net of rebates and discounts) levies and any other directly attributable cost and indirect expenditure for bringing the asset to its working condition for the intended use less accumulated depreciation

d. Depreciation

i. Depreciation on all completed Fixed Assets is provided on the Straight Line Method in accordance with the Schedule XIV of Companies Act, 1956.

ii. Leasehold land is amortized over the period of lease.

iii. Software costs relating to acquisition and development are capitalized in the year of purchase and amortized on a straight-line basis over its useful life not exceeding 10 years.

iv. Improvement in Building is written off in three equal annual installments.

e. Borrowing Cost

Borrowing costs specifically relatable to acquisition of fixed assets are capitalized as part of the cost of fixed assets- Other borrowing costs are charged to revenue-

f. Inventories

Inventories are valued as follows :

Finished goods and Work in Progress : Lower of cost and net realizable value-

Scrap : Net Realisable value

Raw Material, Stores and Spare and others : Lower of cost and net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products, in which they will be incorporated, are expected to be sold at or above cost- Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average-

g. Foreign Currency Transactions

The monetary items of foreign currency transactions (not covered under forward contracts) are converted into Indian Rupees at the exchange rates prevailing on the date of Balance Sheet. The Exchange difference on such conversion is adjusted in Income/Expenditure. Foreign Currency transactions are recognized at the exchange rate prevailing at the time of transaction-

In respect of Forward Exchange Contract entered into by the Company, the difference between the contracted rate and the rate at the date of transaction is recognized as gain or loss over the period of contract- Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year-

h. Share issue expenses are amortised in 5 yearly equal installments-

i. Current Tax is being provided as per the prevailing provisions of Income Tax Act, 1961-

j. In accordance with AS 14 on 'Disclosure of Revenue from Sales Transactions' issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in Profit & Loss Account-

k. Deferred Taxation

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the substantively enacted rate of tax on the Balance Sheet date, to the extent that the timing differences are expected to crystallize / capable of reversal as deferred tax charge / benefit in the Profit and Loss Account and as deferred tax liability / asset in the Balance Sheet-

l. Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of the impairment / loss of the fixed assets- If any indication exists, an asset recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount- The recoverable amount is greater of the net selling price and value in use- In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital-

m. Retirement and other Employee Benefits

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year-

Retirement benefits in the form of Provident Fund (where contributed to the Regional PF Commissioner) is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.

Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

Actuarial gains/losses are immediately taken to Profit and Loss account and are not deferred.

n. Segment Reporting

1. Business Segment: In the opinion of the management, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standard 17 'Segment Reporting', prescribed by the companies (Accounting Standards) Rules, 2006.

2. Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.

Accordingly, Information about secondary business segment have been considered for disclosure as follows:

For Sales Revenue

- Sales revenue with in India includes Sales to customers with in India.

- Sales revenue outside India includes Sales to customers located outside India.

For Carrying Amount of Geographical Segment Assets (i.e. Debtors)

Carrying amount receivables / (Advance from Customers) of Geographical segmented assets are as follows:

- Receivables within India

- Receivables outside India

- Segment Liabilities outside India (Advance from Customers)

For Common Fixed Assets

The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.


Mar 31, 2011

A. Basis of Accounting

i The Accounts of the Company are prepared under the historical cost convention. For recognition of income and expenses, accrual basis of accounting is followed except for claims not accepted / acknowledged, which are accounted for on cash basis on account of uncertainties.

ii Gratuity and Leave encashment liability is accounted for on accrual basis as per the Acturial Valuation determined, at the end of accounting year.

iii Cenvat benefit on the raw material stocks is accounted for on the basis of production plan for excisable and non - excisable products.

b. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.

Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.

Export Benefit

Export Benefits constituting import duty benefits under Duty Exemption Pass Book (DEPB) are accounted for on accrual basis.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

c. Fixed Assets

Fixed Assets have been shown at cost of acquisition, comprising of purchase price (net of rebates and discounts) levies and any other directly attributable cost and indirect expenditure for bringing the asset to its working condition for the intended use less accumulated depreciation

d. Depreciation

i. Depreciation on all completed Fixed Assets is provided on the Straight Line Method in accordance with the Schedule XIV of Companies Act, 1956.

ii. Leasehold land is amortized over the period of lease.

iii. Software costs relating to acquisition and development are capitalized in the year of purchase and amortized on a straight-line basis over its useful life not exceeding 10 years.

iv. Improvement in building is written off in three equal annual installments.

e. Borrowing Cost

Borrowing costs specifically relatable to acquisition of fixed assets are capitalized as part of the cost of fixed assets. Other borrowing costs are charged to revenue.

f. Inventories

Inventories are valued as follows :

Finished goods and Work in Progress : Lower of cost and net realizable value.

Scrap : Net Realisable value

Raw Material, Stores

and Spare and others : Lower of cost and net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products, in which they will be incorporated, are expected to be sold at or above cost. Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average.

g. Foreign Currency Transactions

The monetary items of foreign currency transactions (not covered under forward contracts) are converted into Indian Rupees at the exchange rates prevailing on the date of Balance Sheet. The exchange difference on such conversion is adjusted in the respective assets/liabilities and income/ expenditure. Foreign currency transactions are recognized at the exchange rate prevailing at the time of transaction.

In respect of forward exchange contract entered into by the Company, the difference between the contracted rate and the rate at the date of transaction is recognized as gain or loss over the period of contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.

h. Share issue expenses are amortised in 5 yearly equal installments.

i. Current Tax is being provided as per the prevailing provisions of Income Tax Act, 1961.

j. In accordance with ASI 14 on 'Disclosure of Revenue from Sales Transactions' issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in profit & loss account.

k. Deferred Taxation

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the substantively enacted rate of tax on the balance sheet date, to the extent that the timing differences are expected to crystallize / capable of reversal as deferred tax charge / benefit in the profit and loss account and as deferred tax liability / asset in the balance sheet.

l. Impairment of assets

Consideration is given at each balance sheet date to determine whether there is any indication of the impairment / loss of the fixed assets. If any indication exists, an asset recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

m. Retirement and other Employee Benefits

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

Retirement benefits in the form of Provident Fund (where contributed to the Regional PF Commissioner) is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.

Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

Actuarial gains/losses are immediately taken to Profit and Loss account and are not deferred.

n. Segment Reporting

The activities of the Company relate to single segement i.e. pharmaceuticals business segment and has only one reportable segment. However, the analysis of Company's revenue generation is based on the geographical location of its customer's and does not have any identifiable 'Primary Segment' for reporting.

Accordingly, the geographical location segment have been considered for disclosure as follows:

For Sales Revenue;

- Sales revenue with in india includes Sales to customers with in india.

- Sales revenue outside india includes Sales to customers located outside india.

For Carrying Amount of Geographical Segment Assets (i.e. Debtors);

Carrying amount (receivables) of Geographical segmented assets are as follows:

- Receivables within India

- Receivables outside India

For Common Fixed Assets;

The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.

 
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