Jun 30, 2011
1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:
The Financial statements have been prepared under the historical cost convention, on an accrual basis of accounting, to comply in all the material respects with the notified accounting standards by the Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act,1956. The Accounting principles discussed more fully below are consistent with those used in the previous year.
2. REVENUE RECOGNITION:
Sales of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Exports sale are recognized on the basis of Shipping/ Airway Bills. Sales stated are excluding sales tax and net of returns.
3. USE OF ESTIMATES:
The presentation of financial statement in conformity with the generally accepted principles requires estimates and assumptions to be made, that affect the reported amount of assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.
4. FIXED ASSETS:
a) Fixed Assets are stated at their historical cost, adjusted by revaluation of certain land & building less provision for impairment losses, if any, depreciation, amortization and adjustments on account of foreign exchange fluctuations in respect of changes in rupee liability of foreign currency loans used for acquisition of fixed assets.
b) Borrowing cost eligible for Capitalization, incurred in respect of acquisition/construction of the qualifying assets, till the asset is substantially ready for use, are capitalized as part of the cost of that assets.
c) Pre operative, Trial run and incidental expenses relating to the projects are carried forward to be capitalized and apportioned to various assets on commissioning of the Project.
5. CAPITAL WORK IN PROGRESS:
Advance paid towards acquisition of fixed assets which have not been installed or put to use, and the cost of assets not put to use, before the year end are disclosed under Capital Work in Progress .
Depreciation on fixed assets is provided using the written down value method and as per rate provided in the XIV schedule of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on the pro-rata basis for assets purchased/sold during the year.
Items of inventories are valued on the basis given below:
Raw Materials and Packing Materials: At Cost net of CENVAT/VAT computed on first in-first out method.
Work in process and Finished Goods: At Cost including material cost net of CENVAT, labour cost and all overheads other than selling and distribution overheads for work-in- process and the same or realizable value, whichever is lower in case of finish goods except physician samples which are valued at cost as computed above.
Stores and Spares: Stores and spares parts are valued at purchase cost.
8. FOREIGN CURRENCY TRANSACTIONS:
Foreign currency assets and liabilities are translated at exchange rate prevailing on the last working day of the accounting year. Gain or loss on the restatement of foreign currency transaction or on cancellation of forward contract if any, is reflected in the Profit and Loss account except gain or loss relating to acquisition of fixed assets which is adjusted to the carrying cost of fixed assets.
Transaction in Foreign Currency is recorded in the Books of Account in Indian Rupee at the rate of exchange prevailing on the date of transaction.
Long Term Investments are Valued at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary, in the opinion of the Management.
10. BORROWING COST:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of times to get ready for it's intend use. All other borrowing costs are charged to revenue.
11. EARNINGS PER SHARE:
The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earning per share is computed by dividing the net Profit or Loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive. This includes employee stock options granted and outstanding.
Current Tax: Current Tax is calculated as per the provisions of the Income Ta x Act, 1961
Deferred Tax: Deferred tax is recognized on timing differences being the differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are subject to the consideration of prudence are recognized and carried forward only to the extent that there is reasonably certainly that sufficient taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end based on the tax rates and law enacted or substantially enacted on balance sheet date.
MAT Credit: MAT Credit entitlement is recognized only when the company actually avails MAT credit based on its annual tax computation.
13. PROVISIONS AND CONTINGENT LIABILITIES:
Provisions are recognized for present obligations, of uncertain timing or amount, arising as a result of past event where reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations. Where it is not probable that an outflow of resources embodying economic benefit will be required or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow of resources embodying economic benefit is remote.
Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, are so also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefit is remote.
14. EMPLOYEE BENEFITS:
a. Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering the service, are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.
b. Long Term Employee Benefits
- Retirement Benefit in the form of provident fund is a defined contribution scheme and contributions are charged to the Profit and Loss account for the year/period when the contributions are due.
- Leave Encashment is recognized on the basis of payment at the end of the year.
15. CENVAT and Service Tax Credit:
CENVAT and Service Tax credit utilized during the year is accounted in excise duty and unutilized CENVAT/ Service Ta x balance at the year end is considered as advance excise duty.
16. MISCELLANEOUS EXPENDUTURE:
- Expenditure on formation of company being in the nature of preliminary expenses is amortized over the period of ten years.
- The expenditure incurred in respect of IPO have been treated as deferred revenue expenditure and amortized over a period of 10 years.
Jun 30, 2009
1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost convention on accrual basis in accordance with the generally accepted accounting principles as adopted consistently by the Company and the provisions of the Companies Act 1956.
2. REVENUE RECOGNITION:
Items of Income and Expenditure are recognized on accrual basis except duty draw back, insurance claims and Dividend which are being accounted for on cash basis, as it is not possible to ascertain the exact amount with reasonable accuracy.
3. FIXED ASSETS:
Fixed Assets are recorded at cost of acquisition or construction less CENVAT credit avail. Interest during the period of acquisition or construction is added to the cost of the assets. Revalued assets are recorded at revalued amounts less Depreciation.
4. CAPITAL WORK IN PROGRESS:
Advance paid towards acquisition of fixed assets which have not been installed or put to use, and the cost of assets not put to use, before the year end are disclosed under Capital Work in Progress
Depreciation on fixed assets is provided using the written down value method and as per rate provided in the IV schedule of the Companies Act, 1956,based on the useful life as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.
Raw material/Packing material : At cost net off CENVAT computed on first in first out method.
Finished Goods & Work In Process : At cost including material cost net of CENVAT, Labour cost and all overheads other than selling and distribution overheads for work in process and the same or realizable value, which ever is lower in case of finished goods.
7. FOREIGN CURRENCY TRANSACTIONS:
Foreign currency transactions are recorded at the rate of exchange prevailing to the date of transaction. At the year end all monetary assets and liabilities denominated in foreign currency are restated at the year end exchange rates. The premium or discount on forward contracts are amortised over the period of the contract. Exchange differences on arising on actual payment/realisation and year end reinstatement referred to the above are adjusted:
i In. respect of fixed assets acquired outside the country to the related cost of fixed assets and
ii All other cases in the profit and loss account.
8. RETIREMENT BENEFITS :
The retirement benefits such as contribution of provident fund, leave encashment, etc. are accounted for on accrual basis and charge to profit and loss account as per applicable rules/statutes.
9. MISCELLANEOUS EXPENDUTURE :.
i. Expenditure on formation of company being in the nature of preliminary expenses is amortized over the period of ten years.
ii. The expenditure incurred in respect of IPO have been treated as deferred revenue expenditure and amortized over a period of 5 years.
10. CASH FLOW STATEMENTS
The Cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on cash flow statements and present cash flows by operating, investing & financing activities of the company.
11. TAXATION :
Provision for current tax is made on the basis of Tax liability computed in accordance with the relevant tax rates and tax laws. Provision for deferred tax is made for timing differences arising between the taxable income and accounting income computed using the tax rates and the laws enacted as on the date of balance sheet.
12. FRINGE BENEFIT TAX:
Fringe benefit tax (FBT) payable under the provisions of section 115WC of the Income tax Act, 1961 is in accordance with the guidance note on accounting for Fringe Benefit Tax issued by the ICAI regarded as an additional income tax and considered in determination of the profits/losses for the year.
13. IMPAIRMENT OF FIXED ASSETS :
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the companys fixed assets. If any indication exist, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an assets exceeds recoverable amount.