Accounting Policies of Gennex Laboratories Ltd. Company
Mar 31, 2023
1. Company Background
Gennex Laboratories Limited ("the Company") is a public limited company domiciled and incorporated in India in accordance with the provisions of the Companies Act, 1956. The registered office of the Company is located at Sy.IMo.133, IDA Bollaram, Jinnaram Mandal, Sangareddy District - 502 325, Telangana. The equity shares of the Company are listed on the Bombay Stock Exchange.
The Company is engaged in the business of manufacturing of Bulk Drugs and Intermediaries. The Company has manufacturing facilities in India which caters to both domestic and international markets.
These financial statements for the year ended March 31,2023, were authorized and approved for issue by the Board of Directors on May 30,2023.
2. Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of the Financial Statements. These polices have been consistently applied to all the years presented, unless otherwise stated.
(i) Compliance with Ind AS
The Financial statements comply in all material respects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the "Act") [Companies (Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
(ii) Historical cost convention
The financial statements have been prepared on going concern basis under the historical cost except for the following:
⢠Certain Financial assets and liabilities which are measured atfairvalue.
⢠Defined benefit plans - plan assets measured at fair value; and
⢠Contingent Consideration
(iii) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non- current classification. An asset is classified as current when it is:
⢠Expected to be realized or intended to sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current. A liability is classified as current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non- current.
Deferred tax assets and liabilities are classified as non-current.
All amounts disclosed in the Financial Statements and notes have been rounded off to the nearest rupees as per the requirement of Schedule Ilf unless otherwise stated.
2.2. Properties, plant and equipment (PPE) Recognition and initial measurements
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its Working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized instatement of profit or loss as incurred.
Depreciation method, estimated useful lives and residual values
The classification of Plant and equipment into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives as estimated by management which coincides with rates prescribed in Schedule II to the Companies Act, 2013.
Cost of the leasehold land is amortized on a straight-line basis overthe term of the lease.
The residual values, useful lives and method of depreciation of are reviewed at each financial year end and adjusted prospectively, if appropriate.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on deRecognition of the asset (calculated as the Difference between the net disposal proceeds and the carrying amount of the asset) is included in the other income/other expenses when the asset is derecognized.
2.3. Intangible AssetsRecognition and initial measurement
Intangible assets (including software) are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Amortisation method and period
Computer software is amortised on a pro-rata basis using the straight-line method over its estimated useful life of 3 years from the date they are available for use. Amortisation method and useful lives are reviewed periodically including at each financial year end. Investment Properties
2.4. Impairment of non-financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fairvalue less costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group or assets (cash-generating units). The Company''s corporate assets (eg. Central office building for providing support to various CGUs) do not generate independent cash flows. To determinate impairment of corporate assets, recoverable amount is determined for the CGUs to which the corporate assets belongs.
⢠Stores & Spares are valued at cost or at net realizable value, whichever is lower. Cost is arrived at Weighted Average Basis.
⢠Raw Material, Semi-Finished Goods, Finished Goods are valued at Cost or Market Value whichever is lower. Cost is arrived at FIFO method.
⢠Obsolescence and Damaged materials are valued at Realizable Value.
2.6. Operating Leases As a lessee
Leases of property, plant and equipment where the Company, as a lessee, has substantial risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fire value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding lease rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability of each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are clarified as operating leases. Payments made under operating leases are charges to profit or loss on a straight-line basis over the period ofthe lease unless the payments are structured to increasein linewith expected general inflation to compensate for the lessor''s expected inflationary cost increases.
Lease income from operating leases where the Company is a lessor is recognized in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary costs increases. The respective leased assets are included in the Balance Sheet based on their nature.
2.7. Investment and other financial assets Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and
⢠those to be measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business model for managing those assets changes.
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
⢠Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is subsequently measured at amortised cost is recognised in profit or loss when the asset is derecognised or impaired.
⢠Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in the profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in ''Other income''.
⢠Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instrument that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the Statement of Profit and Loss within ''Other income'' in the period in which it arises.
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Changes in the fair value of financial assets at fair value through profit or loss are recognised in ''Other income'' in the Statement of Profit and Loss.
Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109/Financial Instruments'', which requires expected lifetime losses to be recognised from initial recognition of the receivables.
De-recognition of financial assets
Afinancial asset is derecognised only when
⢠the Company has transferred the rights to receive cash flows from the financial asset or
⢠retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
Income recognition Interest income
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
Fair value of financial instruments
In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realised.
The Company enters into certain derivative contracts to hedge risks which are not designated as hedges. Derivative instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period, with changes included in ''Other income''/''Other expenses''
2.9. Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary course of business. Trade receivables are recognised initially atfairvalue and subsequently measured at amortised cost using the effective interest method, less provision for impairment.
2.11. Cash and Cash equivalents
For the purpose of presentation in the Cash Flow Statement, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 90 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings are initially recognised atfairvalue, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
2.14. Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction ratherthan through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the Balance Sheet.
Revenue is recognised to the extent that it is probable that the economic benefits will flowto the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
The specific recognition criteria described below must also be met before revenue is recognised.
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are expensed in the period in which they are incurred.
2.18. Foreign currency transactions and translation
(i) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (''the functional currency'')- The financial statements are presented in Indian Rupee (Rupees or H), which is the Company''s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of thetransactions. At theyear-end, monetary assets and liabilities denominated in foreign currencies are restated at the year-end exchange rates. The exchange differences arising from settlement of foreign currency transactions and from theyear-end restatement are recognised in profit and loss.
Foreign exchange differences regarded as an adjustment to borrowing costs, if any, are presented in the Statement of Profit and Loss, within ''Finance costs''. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within ''Other income/Other expenses''.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
(i) Short-term employee benefits
Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Post-employment benefits. Defined benefit plans
The liability or asset recognised in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in ''Employee benefits expense''in the Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. These are included in retained earnings in the Statement of Changes in Equity.
The Company has gratuity as defined benefit plan where the amount that an employee will receive on retirement is defined by reference to the employee''s length of service and final salary. The liability recognised in the balance sheet for Defined Benefit Plans as the present value of the Defined Benefit Obligation (DBO) at the reporting date. Management estimates the DBO annually with the assistance of Independent actuaries. Actuarial gains and losses resulting from re-measurements of the liability are included in other comprehensive income.
During the Year the Company has not renewed the group gratuity scheme policy held with The Life Insurance Corporation of India (LIC). Therefore, gratuity valuation has been done through Independent agency as per lnd-AS19 (Employee Benefits). As per the valuation made by the Independent Agency the present value of accrued gratuity comes to Rs 29,22,601/- on estimates of discounts @ 7.12% and escalation on salaries @ 5% which has taken in Notes to accounts.
Contributions under defined contribution plans payable in keeping with the related schemes are recognised as expenses for the period in which the employee has rendered the service.
(iii) Other long-term employee benefits
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured annually by actuaries as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented under ''Employee benefit obligations'' (current) in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Tax expense recognized instatement of profit or loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Calculation of current tax is based on tax rates and tax laws that have been enacted for the reporting period.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly inequity.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. This is assessed based on the Company''s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allowthe deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theyearwhen the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognized outside profit or loss (either in other comprehensive income or inequity).
Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for financial reporting purposes and their respective tax bases that are considered temporary in nature. Valuation of deferred tax assets is dependent on management''s assessment offuture recoverability of the deferred benefit. Expected recoverability may result from expected taxable income in the future, planned transactions or planned optimizing measures. Economic conditions may change and lead to a different conclusion regarding recoverability.
2.21. Provision and Contingencies
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the end of the reporting period but not distributed at the end of the reporting period.
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠by the weighted average number of equity shares outstanding during the financial year
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
* the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
The Company is engaged in manufacture of Bulk Drugs & Intermediates which in the context of Accounting Standard - 17 issued by the Institute of Chartered Accountants of India is considered as a single segment- Ref. Note 31D.
2.25. Critical estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed at each Balance Sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
⢠Employee benefits (estimation of defined benefit obligation)
Post-employment benefits represent obligations that will be settled in the future and require assumptions to project benefit obligations. Post-employment benefit accounting is intended to reflect the recognition of future benefit costs over the employee''s approximate service period, based on the terms of the plans and the investment and funding decisions made. The accounting requires the Company to make assumptions regarding variables such as discount rate and salary growth rate. Changes in these key assumptions can have a significant impact on the defined benefit obligations.
⢠Impairment of trade receivables
The risk of un collectability of trade receivables is primarily estimated based on prior experience with, and the past due status of, doubtful debtors, based on factors that include ability to pay, bankruptcy and payment history. The assumptions and estimates applied for determining the provision for impairment are reviewed periodically.
⢠Estimation of expected useful lives of property, plant and equipment
Management reviews its estimate of the useful lives of property, plant and equipment at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of property, plant and equipment.
Mar 31, 2018
NOTES TO FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDED 31ST MARCH 2018
1. GENERAL INFORMATION
Gennex Laboratories Limited (âthe Companyâ) is a public limited company domiciled and incorporated in India in accordance with the provisions of the Companies Act, 1956. The registered office of the Company is located at Sy.No.133, IDA Bollaram, Jinnaram Mandal, Sangareddy District - 502 325, Telangana. The equity shares of the Company are listed on the Bombay Stock Exchange.
The Company is engaged in the business of manufacturing of Bulk Drugs and Intermediates. The Company has manufacturing facilities in India which caters to both domestic and international markets.
These financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 30 May 2018.
2. BASIS OF PREPARATION
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under section 133 of the Companies Act 2013 (âthe Actâ) read with the Companies (Indian Accounting Standards) Rules 2015 issued by Ministry of Corporate Affairs (âMCAâ). The Company has uniformly applied the accounting policies during the periods presented.
For all periods up to and including the year ended 31 March 2017, the Company has prepared its financial statements in accordance with accounting standards notified under the section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). These financial statements for the year ended 31 March 2018 are the first which the Company has prepared in accordance with Ind AS (see note 36 for explanation for transition to Ind AS). For the purpose of comparatives, financial statements for the year ended 31 March 2017 are also prepared under Ind AS.
Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as â0â in the relevant notes in these financial statements.
The financial statements have been prepared on going concern basis under the historical cost basis except for the following:
- Certain Financial assets and liabilities which are measured at fair value.
- Share based payments which are measured at fair value of the options; and
- Contingent Consideration.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared using the accounting policies and measurement basis summarized below.
a. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is classified as current when it is:
- Expected to be realized or intended to sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as noncurrent. A liability is classified as current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as noncurrent.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
b. Foreign currency
Functional and presentation currency
The financial statements are presented in Indian Rupee (âINRâ or â''â) which is also the functional and presentation currency of the Company.
Transactions and balances Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and nonmonetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
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, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
GST/Excise duty is a liability of the Company as a manufacturer, which forms part of the cost of production, irrespective of whether the goods are sold or not. Therefore, the recovery of GST/Excise duty flows to the Company on its own account and hence revenue includes GST/Excise duty.
The specific recognition criteria described below must also be met before revenue is recognized.
Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Service Revenue
Service income is recognized as per the terms of contracts with the customers when the related services are performed or the agreed milestones are achieved and revenue includes Service tax / GST, wherever applicable.
Interest Income
Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. For all debt instruments measured at amortized cost, interest income is
recorded using the Effective Interest Rate (EIR) method.
Dividend income
Dividend income is recognized at the time when right to receive the payment is established, which is generally when the shareholders approve the dividend.
Licensing and long term supply arrangements: Revenue from licensing and long term supply arrangements is recognized in the period in which the Company completes all its performance obligations.
d. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss as incurred.
e. Property, plant and equipment (PPE) Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its Working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement
(depreciation and useful lives)
Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives as estimated by management which coincides with rates prescribed in Schedule II to the Companies Act, 2013.
Cost of the leasehold land is amortized on a straight-line basis over the term of the lease.
The residual values, useful lives and method of depreciation of are reviewed at each financial year end and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Transition to Ind AS
On transition to Ind AS, the Company has selected to continue with the carrying value of all its property, plant and equipment recognized as at 1 April 2017 measured as per the provisions of Previous GAAP and use that carrying value as the deemed cost of property, plant and equipment.
f. Intangible assets
Recognition and initial measurement
Intangible assets (including software) are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
On transition to IndAS, the company has elected to continue with the carrying value of all its intangible assets recognized as at 1 April 2017 measured as per the provisions of Previous GAAP and use that carrying value as the deemed cost of property, plant and equipment.
g. Operating leases
Where the lessor effectively retains all risk and benefits of ownership of the leased items, such leases 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.
h. Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the Recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
i. Financial Instruments Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial asset is also adjusted.
Subsequent measurement
i. Debt instruments at amortized cost
- A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method.
ii. Equity investments - All Current equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are generally classified as at Fair Value Through Profit And Loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at Fair Value Through Other Comprehensive Income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
iii. All non-current Investments including investment in Associates are valued at cost.
iv. De-recognition of financial assets
A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
j. Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial liabilities is also adjusted. These liabilities are classified as amortized cost.
Subsequent measurement
These liabilities include are borrowings and deposits. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method. De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognized less cumulative amortization. k. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
l. Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss for financial assets.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive. When estimating the cash flows, the Company is required to consider -
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade receivables
The Company applies approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of receivables.
Other financial assets
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, impairment loss is provided.
m. Inventories
- Stores & Spares are valued at cost or at net realizable value, whichever is lower. Cost is arrived at Weighted Average Basis.
- Raw Material, Semi Finished Goods, Finished Goods are valued at Cost or
Market Value whichever is lower. Cost is arrived at FIFO method.
- Obsolescence and Damaged materials are valued at Realizable Value.
n. Income taxes
Tax expense recognized in statement of profit or loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Calculation of current tax is based on tax rates and tax laws that have been enacted for the reporting period. Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. This is assessed based on the Companyâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).
o. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, etc. that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
p. Post-employment, long term and short term employee benefits Defined contribution plan
The Companyâs contribution to provident fund and employee state insurance schemes is charged to the statement of profit and loss. The Companyâs contributions towards Provident Fund are deposited with the Regional Provident Fund Commissioner under a defined contribution plan.
Defined benefit plan
The Company has gratuity as defined benefit plan where the amount that an employee will receive on retirement is defined by reference to the employeeâs length of service and final salary. The liability recognized in the balance sheet for Defined Benefit Plans as the present value of the Defined Benefit Obligation (DBO) at the reporting date. Management estimates the DBO annually with the assistance of Independent actuaries. Actuarial gains and losses resulting from re-measurements of the liability are included in other comprehensive income.
The Company has subscribed to a group gratuity scheme of Life Insurance Corporation of India (LIC). Under the said policy, the eligible employees are entitled for gratuity upon their resignation, retirement or in the event of death in lumpsum after deduction of necessary taxes up to a maximum limit of 20 lacs. Liabilities in respect of the Gratuity Plan
are determined by an actuarial valuation, based upon which the Company makes contributions to the Gratuity Fund. Short-term employee benefits:
Short-term employee benefits comprise of employee costs such as salaries, bonus etc. is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
q. Share based payments
The employee benefits expense is measured using the fair value of the employee stock options and is recognized over vesting period with a corresponding increase in equity. The vesting period is the period over which all the specified vesting conditions are to be satisfied.
r. Provisions, Contingent liabilities and Contingent assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.
Contingent liability is disclosed for:
a. Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.
s. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
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.
4. ESTIMATES AND ASSUMPTIONS The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilized. In addition, significant j judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions (see note 20).
Recognition of deferred tax liability on undistributed profits:
The extent to which the Company can control the timing of reversal of deferred tax liability on undistributed profits of its subsidiaries requires judgments. Evaluation of indicators for impairment of assets: The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. Recoverability of advances/receivables:
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
Useful lives of depreciable/amortizable assets: Management reviews its estimate of the useful lives of depreciable/ amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT equipment and other plant and equipment.
Defined benefit obligation (DBO):
Managementâs estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the D BO a m ou n t an d t h e a n n ual d e fi n e d benefit expenses.
Provisions:
At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However, the actual future outcome may be different from this judgments.
Mar 31, 2016
a. BASIS OF ACCOUNTING:
Financial Statement are prepared under historical cost convention and in accordance with the normally accepted accounting standards.
b. FIXED ASSETS:
a) Fixed Assets are stated at Cost less depreciation & inclusive of expenses up to commissioning/putting the assets to use.
b) DEPRECIATION:
Depreciation is systematically allocated over the useful life of the asset as specified in Schedule- II of the Companies Act, 2013.
c) INVESTMENTS:
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.
d) REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis except as stated otherwise.
e) FOREIGN EXCHANGE TRANSACTIONS
Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of transaction.
Monetary items ( Assets & Liabilities) denominated in foreign currency are translated into rupees at the Exchange rates prevailing on the Balance Sheet date. Exchange Differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange translations are recognized in the Profit and Loss Account.
f) VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realizable value, whichever is lower. Cost is arrived at Weighted Average Basis.
ii. Raw Material, Semi Finished Goods, Finished Goods are valued at cost or market value whichever is lower. Cost is arrived at FIFO method.
iii. Obsolescence and Damaged materials are valued at realizable value.
g) CENTRAL EXCISE
Central Excise account is treated as current account by making adjustment of the debit & credit given to/taken from the department including relief.
h) EMPLOYEE BENEFITS
a) Provident Fund is administered through Regional Provident Fund Commissioner. The contribution to the Provident Fund is charged against revenue.
b) Gratuity Liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on Projected unit credit method. The company has created an approved gratuity fund, and has taken a group gratuity cum insurance policy with Life Insurance Corporation of India (LIC) for future payment of gratuity to the employees.
c) Leave Encashment is accounts for on actuarial basis.
i) SEGMENT REPORTING
Segments are identified having regard to the dominant source and nature of risks and returns and the internal organization and management structure. Revenues, Expenses and assets which relates to the enterprise as a whole and are not attributable to segments are included under âUnallocable Corporate Expenses/Revenuesâ
j) TAXES ON INCOME
Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
k) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed, while Contingent Assets are neither recognized nor disclosed, in the financial statements.
Mar 31, 2015
A BASIS OF ACCOUNTING:
Financial Statement are prepared under historical cost convention and
in accordance with the normally accepted accounting standards.
b FIXED ASSETS:
a) FIXED ASSETS : Fixed Assets are stated at Cost less depreciation and
inclusive of expenses upto Commissioning /putting the assets to use.
b) DEPRECIATION:
Depreciation is systematically allocated over the useful life of the
asset as specified in Schedule-II of Companies Act, 2013.
c INVESTMENTS:
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.
d. REVENUE RECOGNITION:
All the Items of Income and Expenditure are accounted on accrual basis
except as stated otherwise.
e. FOREIGN EXCHANGE TRANSACTIONS:
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of transaction.
Monetary items (Assets & Liabilities) denominated in foreign currency
are translated into rupees at the Exchange rates prevailing on the
Balance Sheet date. Exchange Differences in translation of foreign
currency assets and liabilities and realised gains and losses on
foreign exchange translations are recognised in the Profit and Loss
Account.
f. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower.
Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
g. CENTRAL EXCISE:
Central Excise account is treated as current account by making
adjustment of the debit and credit given to/taken from the department
including relief.
h. EMPLOYEE BENEFITS:
a. Provident Fund is administered through Regional Provident Fund
Commisioner. The contribution to the Provident Fund is charged against
revenue.
b. Gratuity Liability is a defined benefit obligation and is provided
for on the basis of an actuarial valuation on Projected Unit Credit
Method. The company has created an approved gratuity fund, which has
taken a group gratuity cum insurance policy with Life Insurance
Corporation of India (LIC) for future payment of gratuity to the
employees.
c. Leave Encashment is accounted for on actuarial basis.
i. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure.Revenues, Expenses and assets which relates to the enterprise
as a whole and are not attributable to segments are included under
"Unallocable Corporate Expenses/Revenues"
j. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
k. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed, while
Contingent Assets are neither recognized nor disclosed, in the
Financial Statements.
l. Pursuant to enactment of Companies Act, 2013, the company has
applied the estimate useful life as specified in Schedule II
Accordingly the unamortised carrying value is being depreciated /
ammortised over the revised / remaing useful life.
The written down value net off Deferred Tax amounting to Rs.51.48 Lakhs
of Fixed Asset whose lives has expired as at 01.04.2014 has been
adjusted, in opening balance of Profit and Loss Account.
Mar 31, 2014
A. BASIS OF ACCOUNTING:
Financial Statement are prepared under historical cost convention and
in accordance with the normally accepted accounting standards.
b. FIXED ASSETS:
Fixed Assets are valued at the original cost of acquisition net of
Modvat including taxes, freight and other incidental expenses relating
to acquisition and installation.
c. DEPRECIATION:
Depreciation provided at the rate prescribed under Schedule XIV of the
Companies Act, 1956 on Straight line method on pro - rata basis.
d. INVESTMENTS:
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.
e. REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis
except as stated otherwise.
f. FOREIGN EXCHANGE TRANSACTIONS:
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of transaction.
Monetary items (Assets & Liabilities) denominated in foreign currency
are translated into rupees at the Exchange rates prevailing on the
Balance Sheet date.Exchange Differences in translation of foreign
currency assets and liabilities and realised gains and losses on
foreign exchange translations are recognised in the Profit and Loss A/c
g. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower.
Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
h. CENTRAL EXCISE:
Central Excise account is treated as current account by making
adjustment of the debit & credit given to/taken from the department
including relief.
i. EMPLOYEE BENEFITS:
a. Provident Fund is administered through Regional Provident Fund
Commisioner. The contribution to the Provident Fund is charged against
revenue.
b. Gratuity Liability is a defined benefit obligation and is provided
for on the basis of an actuarial valuation on Projected unit credit
method. The company has created an approved gratuity fund, which has
taken a group gratuity cum insurance policy with Life Insurance
Corporation of India (LIC) for future payment of gratuity to the
employees. The company accounts for gratuity liability of its employees
on the basis of Actuarial valuation carried out at the year end by LIC.
c. Leave Encashment is accounted for on accrual basis.
j. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure.Revenues, Expenses and assets which relates to the enterprise
as a whole and are not attributable to segments are included under
"Unallocable Corporate Expenses/Revenues"
k. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measuremnet
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed, while
Contingent Assets are neither recognized nor disclosed, in the
financial statements.
Mar 31, 2013
A. BASIS OF ACCOUNTING:
Financial Statement are prepared under historical cost convention and
in accordance with the normally accepted accounting standards.
b. FIXED ASSETS:
Fixed Assets are valued at the original cost of acquisition net of
Modvat including taxes, freight and other incidental expenses relating
to acquisition and installation.
c. DEPRECIATION:
Depreciation provided at the rate prescribed under Schedule XIV of the
Companies Act, 1956 on Straight line method on pro - rata basis.
d. INVESTMENTS:
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.
e. REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis
except as stated otherwise.
f. FOREIGN EXCHANGE TRANSACTIONS:
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of transaction.
Monetary items (Assets & Liabilities) denominated in foreign currency
are translated into rupees at the Exchange rates prevailing on the
Balance Sheet date.Exchange Differences in translation of foreign
currency assets and liabilities and realised gains and losses on
foreign exchange translations are recognised in the Profit and Loss A/c
g. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower.
Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
h. CENTRAL EXCISE:
Central Excise account is treated as current account by making
adjustment of the debit & credit given to/taken from the department
including relief.
i. EMPLOYEE BENEFITS:
a. Provident Fund is administered through Regional Provident Fund
Commisioner. The contribution to the Provident Fund is charged against
revenue.
b. Gratuity Liability is a defined benefit obligation and is provided
for on the basis of an actuarial valuation on Projected unit credit
method. The company has created an approved gratuity fund, which has
taken a group gratuity cum insurance policy with Life Insurance
Corporation of India (LIC) for future payment of gratuity to the
employees. The company accounts for gratuity liability of its employees
on the basis of Actuarial valuation carried out at the year end by LIC.
c. Leave Encashment is accounted for on accrual basis.
j. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure.Revenues, Expenses and assets which relates to the enterprise
as a whole and are not attributable to segments are included under
"Unallocable Corporate Expenses/Revenues"
k. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measuremnet
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed, while
Contingent Assets are neither recognized nor disclosed, in the
financial statements.
Mar 31, 2012
A. BASIS OF ACCOUNTING:
Financial Statement are prepared under historical cost convention and
in accordance with the normally accepted accounting standards.
b. PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS:
During the year ended 31st March, 2012, the revised Schedule VI,
notified under the Companies Act, 1956, has become applicable to the
Company, for preparation and presentation of its financial statements.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The company has also
reclassified the previous year figures in accordance with the
requirements applicable for the current year.
c. FIXED ASSETS:
Fixed Assets are valued at the original cost of acquisition net of
Modvat including taxes, freight and other incidental expenses relating
to acquisition and installation.
d. DEPRECIATION:
Depreciation provided at the rate prescribed under Schedule XIV of the
Companies Act, 1956 on Straight line method on pro-rata basis.
e. INVESTMENTS:
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.
f. REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis
except as stated otherwise.
g. FOREIGN EXCHANGE TRANSACTIONS
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of transaction.
Monetary items ( Assets & Liabilities) denominated in foreign currency
are translated into rupees at the Exchange rates prevailing on the
Balance Sheet date.Exchange Differences in translation of foreign
currency assets and liabilities and realised gains and losses on
foreign exchange translations are recognised in the Profit and Loss
A/c.
h. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower. Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
i. CENTRAL EXCISE
Central Excise account is treated as current account by making
adjustment of the debit & credit given to/taken from the department
including relief.
j. EMPLOYEE BENEFITS:
a. Provident Fund is administered through Regional Provident Fund
Commisioner. The contribution to the Provident Flind is charged against
revenue.
b. Gratuity Liability is a defined benefit obligation and is provided
for on the basis of an actuarial valuation on Projected unit credit
method. The company has created an approved gratuity fund, which has
taken a group gratuity cum insurance policy with Life Insurance
Corporation of India (LIC) for future payment of gratuity to the
employees. The company accounts for gratuity liability of its employees
on the basis of Actuarial valuation carried out at the year end by LIC.
c. Leave Encashment is accounts for on Cash basis.
k. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure.Revenues, Expenses and assets which relates to the enterprise
as a whole and are not attributable to segments are included under
"Unallocable Corporate Expenses/Revenues".
1. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
m. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed, while
Contingent Assets are neither recognized nor disclosed, in the
financial statements.
Mar 31, 2010
A. GENERAL:
Financial Statement are prepared under historical cost convention and
in accordance with the normally accepted accounting standards.
b. FIXED ASSETS:
Fixed Assets are valued at the original cost of acquisition net of
Modvat including taxes, freight and other incidental expenses relating
to acquisition and installation.
c. DEPRECIATION:
Depreciation provided at the rate prescribed under Schedule XIV of the
Companies Act, 1956 on straight line method on pro-rata basis.
d. INVESTMENTS:
Investments are valued at Cost.Provision for dimunition in the value of
Long Term Investments is made only if, such a decline is other than
temporary in the opinion of the Management.
e. REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis
except as stated otherwise.
f. FOREIGN EXCHANGE TRANSACTIONS:
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of transaction. Monetary Items (Assets &
Liabilities) denominated in foreign currency are translated into rupees
at the Exchange rates prevailing on the Balance Sheet date. Exchange
Differences in translation of foreign currency assets and liabilities
and realised gains and losses on foreign exchange translations are
recognised in the Profit and Loss A/c.
g. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower. Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
h. CENTRAL EXCISE:
Central Excise account is treated as current account by making
adjustment of the debit & credit given to/taken from the department
including relief.
i. RETIREMENT BENEFITS:
Gratuity/Leave encashment is accounted for on Accrual basis.
Contribution to Provident Fund & E S I is charged to Revenue Account.
j. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure. Revenues, Expenses and assets which relates to the
enterprise as a whole and are not attributable to segments are included
under "Unallocable Corporate Expenses/Revenues".
k. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Mar 31, 2009
A. GENERAL:
Financial Statement are prepared under historical cost convention and
in accordant with the normally accepted accounting standards.
b. FIXED ASSETS:
Fixed Assets are valued at the original cost of acquisition net of
Modvat including taxes freight and other incidental expenses relating
to acquisition and installation.
c. DEPRECIATION:
Depreciation provided at the rate prescribed under Schedule XIV of the
Companies Act 1956 on straight line method on pro-rata basis.
d. INVESTMENTS:
Investments are valued at Cost.Provision for dimunition in the value of
Long Tern Investments is made only if, such a decline is other than
temporary in the opinion of the Management.
e. REVENUE RECOGNITION:
All the Items of Income and expenditure are accounted on accrual basis
except as statec otherwise.
f. FOREIGN EXCHANGE TRANSACTIONS:
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date oi transaction. Monetary Items (Assets &
Liabilities) denominated in foreign currency are translated into rupees
at the Exchange rates prevailing on the Balance Sheet date. Exchange
Differences in translation of foreign currency assets and liabilities
and realised gains and losses on foreign exchange translations are
recognised in the Profit and Loss A/c.
g. VALUATION OF INVENTORIES:
i. Stores & Spares are valued at cost or at net realisable value,
whichever is lower. Cost is arrived at Weighted Average basis.
ii. Raw Material, Semi finished goods, finished goods are valued at
cost or market value whichever is lower. Cost is arrived at FIFO
method.
iii. Obsolesence and Damaged materials are valued at realisable value.
h. CENTRAL EXCISE:
Central Excise account is treated as current account by making
adjustment of the debit &
credit given to/taken from the department including relief.
i. RETIREMENT BENEFITS:
Gratuity/Leave encashment is accounted for on Accrual basis.
Contribution to Provident
Fund & E SI is charged to Revenue Account.
j. SEGMENT REPORTING:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organisation and management
structure. Revenues, Expenses and assets which relates to the
enterprise as a whole and are not attributable to segments are included
under "Unallocable Corporate Expenses/Revenues".
k. TAXES ON INCOME:
Deferred Tax is recognised, subject to the consideration of prudence,
on timing diferrences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
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