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Accounting Policies of Coral Laboratories Ltd. Company

Mar 31, 2015

I. Framework of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles, Accounting Standards issued by the Institute of Chartered Accountants of India notified u/s 133 of the Companies Act, 2013 and the relevant provisions of Companies Act, 2013 read with Rule 7 of the companies (Accounts) Rules , 2014, the provisions of the act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable.

ii. Uses of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities on the date of financial statements and the results of operations during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

iii. Inventories

a) Inventories are valued at lower of cost and net realizable value. Cost of inventories comprises, cost of purchase, cost of conversion and other cost incurred in bringing them to their present location and conditions and excise duty paid/ payable on such goods.

b) In Dehradun and Daman Plant the Company has written off 20% of Stores and spares yearly from the inventory of stores and spares.

c) Expenditure on stores and spares in other plants is charged to revenue account in theyear of purchase.

iv. Depreciation and Amortization

Depreciation on fixed assets is calculated on straight-line method in the manner and based on useful life as prescribed in schedule II of the Companies Act, 2013. Depreciation on additions / deletions to fixed assets during the year is provided on a pro-rata basis. Further, Depreciation on account of assets whose useful life is already exhausted on April 01,2014 has been adjusted in Profit and loss a/c pursuant to adoption of estimated useful life of assets as stipulated by schedule II of Companies Act 2013.Intangible assets(Computer software) are amortized over a period of 5 years from the date of acquisition.

v. Revenue Recognition

a) Sales are accounted inclusive of excise duty but excluding Sales Tax, and are net of returns / discounts / debit notes/reversals.

b) Excise duty is deducted from turnover (gross) and not the entire amount of liability arisen during theyear.

c) Export Incentive under the Duty Entitlement Pass Book Scheme has been recognised on the cash basis.

d) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

vi. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of purchase price and any cost attributable of bringing the assets to its working condition for its intended use.

b) Direct costs as well as related incidental and identifiable expenses incurred on acquisition of fixed assets that are not yet ready for their intended use or not put to use as on the balance sheet date are stated as Capital Work in Progress. Assets under construction are not depreciated.

c) There is no revaluation of fixed assets carried out during the year.

vii. Foreign Currency Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates.

b) In respect of monetary items which are covered by foreign exchange contracts, the premium or discounts on such forward contract is recognized overthe life of the forward contract.

c) The exchange differences arising on settlement of transaction/ translation of monetary assets and liabilities denominated in foreign currency are recognized in the Profit & Loss Account. In cases, where they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

viii. Investments

a) Investments are classified into current and long term investment.

b) Current investments are carried at lower of cost or market value, computed category wise and the resultant decline, if any, is charged to revenue.

c) Long term investments are stated at cost. Provision is made for any diminution in value, if other than temporary. However, in the opinion of the management, the increase/decrease in the value of investment in shares, is on account of market forces and is not of other than temporary nature and therefore not provided in the books of accounts.

ix. Retirement Benefits

Gratuity in respect of eligible employees has been provided for on the basis of actuarial valuation. As per Accounting Standard 15 the actuarial valuation is considered 5% as salary escalation and average 2% as attrition rate and the retirement age is considered as 58 years.

x. Borrowing Costs:

Borrowings costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are, charged to profit and loss account.

xi. Segment Reporting

The company is engaged in pharmaceutical business, which as per Accounting Standard 17, is considered the only reportable business segment.

xii. Earning Per Share:

a) Basic Earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

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

xiii. Taxation

a) Provision for the Current tax has been made in accordance with the income-tax laws and rules prevailing at the time of the relevant assessment years.

b) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized when there is virtual certainty of reversal.

xiv. Impairment of Assets:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds is recoverable amount. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired.

xv. Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions are recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

b) Contingent liability is disclosed when there is a present or possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation and no reliable estimate is possible.

c) Contingent Assets are neither recognized nor disclosed in the financial statement.

xvi. Other Accounting Policies:

Accounting policies not specifically referred to are consistent with the generally accepted accounting standards.


Mar 31, 2014

I. Framework of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, Accounting Standards issued by the I nstitute of Chartered Accountants of India notified u/s 211 (3C) of the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs to the extent applicable, and the relevant provisions of Companies Act, 1956.

ii. Uses of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities on the date of financial statements and the results of operations during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

iii. Inventories

a) Inventories are valued at lower of cost and net realizable value. Cost of inventories comprises, cost of purchase, cost of conversion and other cost incurred in bringing them to their present location and conditions and excise duty paid/ payable on such goods.

b) In Dehradun and Daman Plant the Company has written off 20% of Stores and spares yearly from the inventory of stores and spares.

c) Expenditure on stores and spares in other plants is charged to revenue account in the year of purchase.

iv. Depreciation and Amortization

Depreciation of fixed assets have been provided on straight line method in the manner and at the rates prescribed in schedule XIV of the Companies Act, 1956. Depreciation on additions / deletion to fixed assets during the year is provided on a pro-rata basis.

Intangible assets (Computer Software) are amortized over a period of 5 years from the date of acquisition.

v. Revenue Recognition

a) Sales are accounted inclusive of excise duty but excluding Sales Tax, and are net of returns / discounts / debit notes / reversals.

b) Excise duty is deducted from turnover (g ross) and not the entire amount of liability arisen during the year.

c) Export Incentive under the Duty Entitlement Pass Book Scheme has been recognised on the cash basis.

d) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

vi. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of purchase price and any cost attributable of bringing the assets to its working condition for its intended use.

b) Direct costs as well as related incidental and identifiable expenses incurred on acquisition of fixed assets that are not yet ready for their intended use or not put to use as on the balance sheet date are stated as Capital Work in Progress. Assets under construction are not depreciated.

c) There is no revaluation of fixed assets carried out during the year.

vii. Foreign Currency Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates.

b) In respect of monetary items which are covered by foreign exchange contracts, the premium or discounts on such forward contract is recognized over the life of the forward contract.

c) The exchange differences arising on settlement of transaction/ translation of monetary assets and liabilities denominated in foreign currency are recognized in the Profit & Loss Account. In cases, where they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

viii. Investments

a) Investments are classified into current and long term investment.

b) Current investments are carried at lower of cost or market value, computed category wise and the resultant decline, if any, is charged to revenue.

c) Long term investments are stated at cost. Provision is made for any diminution in value, if other than temporary. However, in the opinion of the management, the increase/decrease in the value of investment in shares, is on account of market forces and is not of other than temporary nature and therefore not provided in the books of accounts.

ix. Retirement Benefits

Gratuity in respect of eligible employees has been provided for on the basis of actuarial valuation. As per Accounting Standard 15 the actuarial valuation is considered 5% as salary escalation and average 2% as attrition rate and the retirement age is considered as 58 years.

x. Borrowing Costs:

Borrowings costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are, charged to profit and loss account.

xi. Segment Reporting

The company is engaged in pharmaceutical business, which as per Accounting Standard 17, is considered the only reportable business segment.

xii. Earning Per Share:

a) Basic Earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

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

xiii. Taxation

a) Provision for the Current tax has been made in accordance with the income-tax laws and rules prevailing at the time ofthe relevant assessment years.

b) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized when there is virtual certainty of reversal.

xiv. Impairment of Assets:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds is recoverable amount. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired.

xv. Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions are recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

b) Contingent liability is disclosed when there is a present or possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation and no reliable estimate is possible.

c) Contingent Assets are neither recognized nor disclosed in the financial statement.

xvi. Other Accounting Policies:

Accounting policies not specifically referred to are consistent with the generally accepted accounting standards.


Mar 31, 2013

I. Framework of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, Accounting Standards issued by the Institute of Chartered Accountants of India notified u/s 211 (3C) of the Companies Act, 1956 and the relevant provisions of Companies Act, 1956.

ii. Uses of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities on the date of financial statements and the results of operations during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

iii. Inventories

a) Inventories are valued at lower of cost and net realizable value. Cost of inventories comprises, cost of purchase, cost of conversion and other cost incurred in bringing them to their present location and conditions and excise duty paid/ payable on such goods.

b) In Dehradun and Daman Plant the Company has written off 20% of Stores and spares yearly from the inventory of stores and spares.

c) Expenditure on stores and spares in other plants is charged to revenue account in the year of purchase.

iv. Depreciation and Amortization

Depreciation of fixed assets have been provided on straight line method in the manner and at the rates prescribed in schedule XIV of the Companies Act, 1956. Depreciation on additions / deletion to fixed assets during the year is provided on a pro-rata basis.

Intangible assets (Computer Software) are amortized over a period of 5 years from the date of acquisition.

v. Revenue Recognition

a) Sales are accounted inclusive of excise duty but excluding Sales Tax, and are net of returns / discounts / debit notes / reversals.

b) Excise duty is deducted from turnover (gross) and not the entire amount of liability arisen during the year.

c) Export Incentive under the Duty Entitlement Pass Book Scheme has been recognised on the cash basis.

d) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

vi. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of purchase price and any cost attributable of bringing the assets to its working condition for its intended use.

b) Direct costs as well as related incidental and identifiable expenses incurred on acquisition of fixed assets that are not yet ready for their intended use or not put to use as on the balance sheet date are stated as Capital Work in Progress. Assets under construction are not depreciated.

c) There is no revaluation of fixed assets carried out during the year.

vii. Foreign Currency Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates.

b) In respect of monetary items which are covered by foreign exchange contracts, the premium or discounts on such forward contract is recognized over the life of the forward contract.

c) The exchange differences arising on settlement of transaction/ translation of monetary assets and liabilities denominated in foreign currency are recognised in the Profit & Loss Account. In cases, where they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

viii. Investments

a) Investments are classified into current and long term investment.

b) Current investments are carried at lower of cost or market value, computed category wise and the resultant decline, if any, is charged to revenue.

c) Long term investments are stated at cost. Provision is made for any diminution in value, if other than temporary. However, in the opinion of the management, the increase/decrease in the value of investment in shares, is on account of market forces and is not of other than temporary nature and therefore not provided in the books of accounts.

ix. Retirement Benefits

Gratuity in respect of eligible employees has been provided for on the basis of actuarial valuation. As per Accounting Standard 15 the actuarial valuation is considered 5% as salary escalation and average 2% as attrition rate and the retirement age is considered as 60 years.

x. Borrowing Costs:

Borrowings costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are, charged to profit and loss account.

xi. Segment Reporting

The company is engaged in pharmaceutical business, which as per Accounting Standard 17, is considered the only reportable business segment.

xii. Earning Per Share:

a) Basic Earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

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

xiii. Taxation

a) Provision for the Current tax has been made in accordance with the income-tax laws and rules prevailing at the time of the relevant assessment years.

b) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized when there is virtual certainty of reversal.

xiv. Impairment of Assets:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds is recoverable amount. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired.

xv. Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions are recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

b) Contingent liability is disclosed when there is a present or possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation and no reliable estimate is possible.

c) Contingent Assets are neither recognized nor disclosed in the financial statement.

xvi. Other Accounting Policies:

Accounting policies not specifically referred to are consistent with the generally accepted accounting standards.


Mar 31, 2012

I. Framework of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, Accounting Standards issued by the Institute of Chartered Accountants of India notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of Companies Act, 1956.

ii. Uses of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities on the date of financial statements and the results of operations during the reporting periods. Although these estimates are based upon management's knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

iii. Inventories

a) Inventories are valued at lower of cost and realizable value. Cost of inventories comprises, cost of purchase, cost of conversion and other cost incurred in bringing them to their present location and conditions and excise duty paid/ payable on such goods.

b) In Dehradun and Daman Plant the Company has written off 20% of Stores and spares yearly from the inventory of stores and spares.

iv. Depreciation

Depreciation of fixed assets have been provided on straight line method in the manner and at the rates prescribed in schedule XIV of the Companies Act, 1956. Depreciation on additions / deletion to fixed assets during the year is provided on a pro-rata basis.

v. Revenue Recognition

a) Sales are accounted inclusive of excise duty but excluding Sales Tax, and are net of returns / discounts / debit notes / reversals.

b) Excise duty is deducted from turnover (gross) and not the entire amount of liability arisen during the year.

c) Export Incentive under the Duty Entitlement Pass Book Scheme has been recognised on the cash basis.

d) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

vi. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of purchase price and any cost attributable of bringing the assets to its working condition for its intended use.

b) Direct costs as well as related incidental and identifiable expenses incurred on acquisition of fixed assets that are not yet ready for their intended use or not put to use as on the balance sheet date are stated as Capital Work in Progress. Assets under construction are not depreciated.

c) There is no revaluation of fixed assets carried out during the year.

vii. Foreign Currency Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates.

b) In respect of monetary items which are covered by foreign exchange contracts, the premium or discounts on such forward contract is recognized over the life of the forward contract.

c) The exchange differences arising on settlement of transaction/ translation of monetary assets and liabilities denominated in foreign currency are recognised in the Statement of Profit and Loss. In cases, where they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

viii. Investments

a) Investments are classified into current and long term investment.

b) Current investments are carried at lower of cost or market value, computed category wise and the resultant decline, if any, is charged to revenue.

c) Long term investments are stated at cost. Provision is made for any diminution in value, if other than temporary. However, in the opinion of the management, the increase/decrease in the value of investment in shares, is on account of market forces and is not of other than temporary nature and therefore not provided in the books of accounts.

ix. Retirement Benefits

a) Gratuity in respect of eligible employees has been provided for on the basis of actuarial valuation. As per AS15 the actuarial valuation is considered 5% as salary escalation and average 2% as attrition rate and the retirement age is considered as 60 years.

b) Leave Encashment is not provided in books of accounts but is accounted for on cash basis.

x. Borrowing Costs:

Borrowings costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are, charged to the Statement of Profit and Loss.

xi. Segment Reporting

The company is engaged in pharmaceutical business, which as per Accounting Standard - AS 17, is considered the only reportable business segment.

xii. Earning Per Share:

a) Basic Earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares)

b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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.

xiii. Taxation

a) Provision for the Current tax has been made in accordance with the income-tax laws and rules prevailing at the time of the relevant assessment years.

b) Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized when there is virtual certainty of reversal.

xiv. Impairment of Assets:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the company's fixed assets. If any such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds is recoverable amount. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

xv. Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions are recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

b) Contingent liability is disclosed when there is a present or possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation and no reliable estimate is possible.

c) Contingent Assets are neither recognized nor disclosed in the financial statement.

xvi. Other Accounting Policies:

Accounting policies not specifically referred to are consistent with the generally accepted accounting standards.


Mar 31, 2010

1) Framework of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, Accounting Standards issued by the Institute of Chartered Accountants of India notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of Companies Act, 1956.

2) Uses of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities on the date of financial statements and the results of operations during the reporting periods. Although these estimates are based upon managements knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

3) Inventories

a) Inventories are valued at lower of cost and realizable value. Cost of inventories comprises, cost of purchase, cost of conversion and other cost incurred in bringing them to their present location and conditions and excise duty paid/ payable on such goods.

b) In Dehradun Plant the Company has written off 20% of Stores and spares yearly from the inventory of stores and spares.

c) Expenditure on stores and spares in other plants is charged to revenue account in the year of purchase.

4) Depreciation

Depreciation of fixed assets have been provided on straight line method in the manner and at the rates prescribed in schedule XIV of the Companies Act, 1956. Depreciation on additions / deletion to fixed assets during the year is provided on a pro-rata basis.

5) Revenue Recognition

a) Sales are accounted inclusive of excise duty but excluding Sales Tax, and are net of returns / discounts / debit notes / reversals.

b) Excise duty is deducted from turnover (gross) and not the entire amount of liability arisen during the year.

c) Export Incentive under the Duty Entitlement Pass Book Scheme has been recognised on the cash basis.

d) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

6) Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of purchase price and any cost attributable of bringing the assets to its working condition for its intended use.

b) Direct costs as well as related incidental and identifiable expenses incurred on acquisition of fixed assets that are not yet ready for their intended use or not put to use as on the balance sheet date are stated as Capital Work in Progress. Assets under construction are not depreciated.

c) There is no revaluation of fixed assets carried out during the year.

7) Foreign Currency Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates.

b) In respect of monetary items which are covered by foreign exchange contracts, the premium or discounts on such forward contract is recognized over the life of the forward contract.

c) The exchange differences arising on settlement of transaction/ translation of monetary assets and liabilities denominated in foreign currency are recognised in the Profit & Loss Account. In cases, where they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

8) Investments

a) Investments are classified into current and long term investment.

b) Current investments are carried at lower of cost or market value, computed category wise and the resultant decline, if any, is charged to revenue.

c) Long term investments are stated at cost. Provision is made for any diminution in value, if other than temporary. However, in the opinion of the management, the increase/decrease in the value of investment in shares, is on account of market forces and is not of other than temporary nature and therefore not provided in the books of accounts.

9) Retirement Benefits

a) Gratuity in respect of eligible employees has been provided for on the basis of actuarial valuation. As per AS15 the actuarial valuation is considered 5% as salary escalation and average 2% as attrition rate and the retirement age is considered as 60 years.

b) Leave Encashment is not provided in books of accounts but is accounted for on cash basis.

10) Borrowing Costs:

Borrowings costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are, charged to profit and loss account.

11) Segment Reporting

The company is engaged in pharmaceutical business, which as per Accounting Standard - AS 17, is considered the only reportable business segment.

12) Earning Per Share:

a) Basic Earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partiy paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares)

b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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.

13) Taxation

a) Provision for the Current tax has been made in accordance with the income-tax laws and rules prevailing at the time of the relevant assessment years.

b) Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized when there is virtual certainty of reversal,

14) Impairment of Assets:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the companys fixed assets. If any such indication exists, the assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds is recoverable amount. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired.

15) Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions are recognised when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation,

b) Contingent liability is disclosed when there is a present or possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation and no reliable estimate is possible.

c) Contingent Assets are neither recognised nor disclosed in the financial statement.

16) Other Accounting Policies:

Accounting policies not specifically referred to are consistent with the generally accepted accounting standards.

 
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