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Accounting Policies of Hester Biosciences Ltd. Company

Mar 31, 2015

A) BASIS OF PREPARATION:

the financial statements are prepared in accordance with the Generally Accepted Accounting Principles in india (indian GAAP), accounting standards notified under section 133 of the companies Act, 2013 read with rule 7 of the companies (Accounts) Rules, 2014 to the extent applicable under historical cost convention on accrual basis.

b) USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Difference between the actual results and the estimates are recognised in the periods in which the results are known/ materialised.

c) CHANGE IN ACCOUNTING POLICY:

During the year ended 31 March 2015, the company has retrospectively changed its method of providing depreciation on fixed assets from the written down value (WDV) method to straight Line Method (sLM) at the rates higher than the rates prescribed in schedule XiV to the companies Act, 1956 as duly certified by chartered engineer. The management believes that this change will result in a more appropriate presentation of the financial statements of the company and will give a systematic basis of depreciation charge, more representative of the time pattern in which the economic benefits will be derived from the use of these assets. Accordingly, company has charged depreciation of Rs.52.91 million to statement of profit and loss or the year ended on 31 march 2015.The net credit of Rs.19.03 million being the difference of written down value of assets as per WDV method and sLM method as on 31 march 2014 has been shown as an 'exceptional item' in the statement of Profit & Loss for the year ended on 31 march 2015.

d) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the company and can be reliably measured.

Revenue from sale of products is recognised on dispatch or appropriation of goods in accordance with the terms of sale and rewards of ownership have passed to the buyer and Revenue from services are recognised as the related services are performed. sale of goods is recorded net of returns, trade discounts, rebates, VAT/sales Tax, service Tax but inclusive excise duty. interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

e) FIXED ASSETS & DEPRECIATION / AMORTISATION:

Tangible Assets are stated at cost net of recoverable taxes / duties and rebates less accumulated depreciation and impairment loss, if any. Borrowing costs directly attributable to the construction or production of qualifying assets during the period of construction / acquisition are capitalised as part of the cost. subsequent expenditures related to an item of tangible assets are added to its book value only if it increases the future benefits from the existing assets beyond its previously assessed standards of performance. Exchange differences arising out of fluctuation in exchange rate on settlement / period end in foreign currency monetary liabilities in respect of acquisition of fixed assets are adjusted to the cost of the fixed assets.

intangible assets are stated at the consideration paid for acquisition less accumulated amortisation and impairment loss, if any. cost of fixed assets not ready for their intended use before the balance sheet date is disclosed as capital work-in-progress and is carried at cost, comprising direct cost, related incidental expenses and directly attributable interest. Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date is disclosed under long term loans and advances. Depreciation on Fixed Assets is provided on straight Line method (sLM) method based on useful life of the assets as prescribed under Part-c of schedule ii to the companies Act, 2013 except in respect of the following assets of 'New Project', where useful life is different than those prescribed in Schedule ii are used. The Management estimates the useful lives for such fixed assets as under:-

Particulars Estimated Useful Life

Furniture & fixtures over a period of 9 years

Vehicles over a period of 8 years

Plant & machineries, Equipments, over a period of 9 years Electrical installation & Utilities

f) IMPAIRMENT OF ASSETS:

The carrying values of assets are reviewed at each balance sheet for impairment. if any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated cash flows.

g) INVESTMENTS:

Non-current investments are stated at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of investment, if any.

current investments are carried at lower of cost and fair value determined on an individual investment basis

h) INVENTORIES:

inventories are valued at the lower of cost and net realisable value after providing for obsolence / expiry, if any.

Work in progress and finished goods include appropriate proportion of overheads and excise duty, where applicable.

i) BORROWING COSTS:

cost of borrowed funds directly attributable to the acquisition or construction of qualifying assets has been capitalised and included in the cost of fixed assets till such assets are ready to be put to use. other borrowing costs are recognised as expenses in the period in which they are incurred.

j) FOREIGN CURRENCY TRANSACTIONS:

i) Foreign currency transactions are recorded at the exchange rates prevailing at the time of transaction.

ii) monetary items representing assets and liabilities denominated in foreign currencies at the balance sheet date are translated at rates prevailing on balance sheet date.

iii) investments in equity capital of company registered outside india are carried in the Balance sheet at the rates prevailing on the date of transaction.

iv) Any income or expenses on account of exchange difference either on settlement or on transaction other than that arising in long term foreign currency items is recognised in the statement of Profit and Loss, for the period in which the difference takes place.

k) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged to the statement of Profit and Loss for the year in which it is incurred. capital expenditure on research and development is shown as an addition to the fixed assets and is depreciated on the same basis as other fixed assets.

l) PROVISION FOR RETIREMENT BENEFITS:

(i) Short-Term Employee Benefits:-

short term employee benefits such as salaries, wages, leave encashment, bonus etc. are recognised as an expense and are charged to the statement of Profit and Loss for the year in which the related services is rendered.

(ii) Post- employment benefit plans:-

i) Defined Contribution Plan:

contribution for provident fund are accrued in accordance with applicable statutes and deposited with the regional Provident Fund commissioner.

ii) Defined Benefit Plan:

The liabilities in respect of gratuity and leave encashment are determined Using Projected Unit credit method with actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit & loss for the period in which they occur.

Contributions in respect of gratuity are made to the Group Gratuity scheme with Life insurance corporation of india. Employee benefits recognised in the Balance sheet represents the present value of the defined benefit obligation as adjusted for Unrecognised past service cost and as reduced by the fair value of respective fund.

m) SEGMENT REPORTING:

The company identifies primary segments based on the nature of products and market catered by each segments for which separate financial information is available and for which operating profit/loss amounts are evaluated by the company.

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole. segment-wise revenue, expenses, assets and liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the company as a whole and are not allocable to specific segment on reasonable basis have been included under unallocated revenue/ expenses/ assets/ liabilities.

n) EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

o) CASH AND CASH EQUIVALENTS:

cash and cash equivalents for the purpose of cash flow statement comprise cash on hand and balance at Bank including fixed deposits with an original maturity period of less than three months and short term investments with an original maturity of three months or less.

p) TAXATION:

i. Current Tax:

Provision for income Tax is determined in accordance with the provisions of income Tax Act, 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognised on timing differences; being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. it is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that there will be sufficient future taxable income available to realise the assets. At each Balance sheet date, recognised and unrecognised Deferred Tax Assets are reviewed.

iii. Minimum Alternative Tax (MAT):

Minimum Alternative Tax (Mat) paid in accordance with the tax laws in india which gives rise to future economic benefit in the form of Mat credit entitlement for adjustment of future income tax liability, is considered as an asset only when there is convincing evidence that the company will pay normal income tax within the specified period. Accordingly Mat is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify. such assets are revised at each balance sheet date.

q) GRANTS

Government grants are recognised when there is reasonable assurance that the company will comply with the conditions attached to them and the grants will be received. Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis.

r) PROVISION AND CONTINGENCIES:

The company creates a provision when there is 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 obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.




Mar 31, 2014

A) BASIS OF PREPARATION:

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) to comply with accounting standards notified under Section 211(3C) (which continues to be applicable in terms of General Circular 15/2013 dated September 13, 2013 of Ministry of corporate Affairs in respect of Section 133 of the Companies Act, 2013) and other relevant provisions of Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

b) USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Difference between the actual results and the estimates are recognized in the periods in which the results are known/ materialized.

c) REVENUE RECOGNITION:

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

Revenue from sale of products is recognized on dispatch or appropriation of goods in accordance with the terms of sale and rewards of ownership have passed to the buyer. Sale of goods is recorded net of returns, trade discounts, rebates, VAT/Sales Tax but inclusive excise duty.

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

d) FIXED ASSETS & DEPRECIATION / AMORTISATION:

Tangible Assets are stated at cost net of recoverable taxes / duties and rebates less accumulated depreciation and impairment loss, if any. Borrowing costs directly attributable to the construction or production of qualifying assets during the period of construction / acquisition are capitalized as part of the cost. Subsequent expenditures related to an item of tangible assets are added to its book value only if it increases the future benefits from the existing assets beyond its previously assessed standards of performance. Exchange differences arising out of fluctuation in exchange rate on settlement / period end in foreign currency monetary liabilities in respect of acquisition of fixed assets are adjusted to the cost of the fixed assets.

Intangible assets are stated at the consideration paid for acquisition less accumulated amortization and impairment loss, if any.

Cost of fixed assets not ready for their intended use before the balance sheet date is disclosed as capital work-in-progress and is carried at cost, comprising direct cost, related incidental expenses and directly attributable interest. Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date is disclosed under long term loans and advances.

Depreciation on assets acquired and used in old project is provided on Straight Line method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on assets acquired for the new project (commissioned during March, 2007) and after March, 2007 is provided on Written down Value method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Cost of intangible Assets are amortised over a period of its estimated useful life.

2 SIGNIFICANT ACCOUNTING POLICIES (Contd.)

e) IMPAIRMENT OF ASSET:

The carrying values of assets are reviewed at each balance sheet for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated cash flows.

f) INVESTMENTS:

Non-current investments are stated at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investment, if any.

Current investments are carried at lower of cost and fair value determined on an individual investment basis.

g) INVENTORIES:

Inventories are valued at the lower of cost and net realizable value after providing for obsolence / expiry, if any.

Work in progress and finished goods include appropriate proportion of overheads and excise duty, where applicable.

h) BORROWING COSTS:

Cost of borrowed funds directly attributable to the acquisition or construction of qualifying assets has been capitalized and included in the cost of fixed assets till such assets are ready to be put to use. Other borrowing costs are recognized as expenses in the period in which they are incurred.

i) FOREIGN CURRENCY TRANSACTIONS:

i) Foreign currency transactions are recorded at the exchange rates prevailing at the time of the transaction.

ii) Monetary items representing assets and liabilities denominated in foreign currencies at the balance sheet date are translated at rates prevailing on balance sheet date.

iii) Investments in equity capital of company registered outside India are carried in the Balance Sheet at the rates prevailing on the date of transaction.

iv) Any income or expenses on account of exchange difference either on settlement or on transaction other than that arising in long term foreign currency items is recognized in the Statement of Profit and Loss, for the period in which the difference takes place.

j) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to the fixed assets and is depreciated on the same basis as other fixed assets.

k) PROVISION FOR RETIREMENT BENEFITS:

(i) Short-Term Employee Benefits:-

Short term employee benefits such as salaries, wages, leave encashment, bonus etc. are recognized as an expense and are charged to the statement of Profit and Loss for the year in which the related services is rendered.

(ii) Post- employment benefit plans:-

i) Defined Contribution Plan:

Contribution for provident fund are accrued in accordance with applicable Statutes and deposited with the Regional Provident Fund Commissioner.

ii) Defined Benefit Plan:

The liabilities in respect of gratuity and leave encashment are determined Using Projected Unit Credit Method with actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit & loss for the period in which they occur.

Contributions in respect of gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for Unrecognized past service cost and as reduced by the fair value of respective fund.

l) SEGMENT REPORTING:

The company identifies primary segments based on the nature of products and market catered by each segments for which separate financial information is available and for which operating profit/loss amounts are evaluated by the company.

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole. Segment-wise revenue, expenses, assets and liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the company as a whole and are not allocable to specific segment on reasonable basis have been included under ''unallocated revenue/ expenses/ assets/ liabilities.''

m) EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

n) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of cash flow statement comprise cash on hand and balance at Bank including fixed deposits with an original maturity period of less than three months and short term investments with an original maturity of three months or less.

o) TAXATION:

i. Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognized on timing differences; being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is virtual certainty that there will be sufficient future taxable income available to realize the assets. At each Balance-sheet date, recognized and unrecognized Deferred Tax Assets are reviewed.

iii. Minimum Alternative Tax (MAT):

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India which gives rise to future economic benefit in the form of MAT credit entitlement for adjustment of future income tax liability, is considered as an asset only when there is convincing evidence that the company will pay normal income tax within the specified period. Accordingly MAT is recognized as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify. Such assets are revised at each balance sheet date.

p) Provision and Contingencies:

The Company creates a provision when there is 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 obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2013

A) ACCOUNTING CONVENTION:

The financial statement of the company have been prepared in accordance with the Generally Accepted Principles in India(Indian GAAP) to comply with Accounting Standards notified under the Companies(Accounting Standards) Rules, 2006(As Amended) and with the relevant provisions of Companies Act-1956. The financial statements have been prepared on accrual basis under the historical cost convention.The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

b) USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Difference between the actual results and the estimates are recognized in the periods in which the results are known/ materialized.

c) REVENUE RECOGNITION:

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

Revenue from sale of products is recognized on dispatch or appropriation of goods in accordance with the terms of sale and rewards of ownership have passed to the buyer. Sale of goods is recorded net of returns, trade discounts, rebates, VAT/Sales Tax but including excise duty.

Interest income is recognized on accrual basis.

d) FIXED ASSETS & DEPRECIATION/AMORTISATION:

Fixed assets are stated at cost less accumulated depreciation. Costs include expenditure directly attributable to the acquisition of the asset. Borrowing costs directly attributable to the construction or production of qualifying assets are capitalized as part of the cost.

Intangible assets are stated at the consideration paid for acquisition less accumulated amortization.

Cost of fixed assets not ready for their intended use before the balance sheet date is disclosed as capital work-in-progress and is carried at cost, comprising direct cost, related incidental expenses and directly attributable interest. Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date is disclosed under long term loans and advances. Depreciation on assets acquired and used in old project is provided on Straight Line methodas per the rates prescribed in Schedule XIVto the Companies Act, 1956.

Depreciation on assets acquired for the new project (commissioned during March, 2007) and after March, 2007 is provided on Written down Value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

Cost of intangible Assets are amortised over a period of its estimated useful life.

e) IMPAIRMENT OF ASSET:

The carrying values of assets are reviewed at each balance sheet for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated cash flows.

f) INVENTORIES:

Inventories are valued at the lower of cost and net realizablevalue after providing for obsolence/ expiry, if any.

Work in progress and finished goods include appropriate proportion of overheads and excise duty, where applicable.

g) INVESTMENTS:

Non-current investments are stated at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investment, if any.

Current investments are carried at lower of cost and fair value determined on an individual investment basis.

h) BORROWING COSTS:

Cost of borrowed funds directly attributable to the acquisition or construction of qualifying assets has been capitalized and included in the cost of fixed assets till such assets are ready to be put to use. Other borrowing costsare recognized as expenses in the period in which they are incurred.

i) FOREIGN CURRENCY TRANSACTIONS:

i) Foreign currency transactions are recorded at the exchange rates prevailing at the time of the transaction.

ii) Monetary items representing assets and liabilities denominated in foreign currencies at the balance sheet date are translated at rates prevailing on balance sheet date.

iii) Investments in equity capital of company registered outside India are carried in the Balance Sheet at the rates prevailing on the date of transaction.

iv) Any income or expenses on account of exchange difference either on settlement or on transaction other than that arising in long term foreign currency items is recognized in the Statement of Profit and Loss, for the period in which the difference takes place.

j) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to the fixed assets and is depreciated on the same basis as other fixed assets.

k) PROVISION FOR RETIREMENT BENEFITS:

(i) Short-Term Employee Benefits:-

Short term employee benefits such as salaries, wages, leave encashment, bonus etc. are recognized as an expense and are charged to the statement of Profit and Loss for the year in which the related services is rendered.

(ii) Post- employment benefit plans:-

i) Defined Contribution Plan:

Contribution for provident fund are accrued in accordance with applicable Statutes and deposited with the Regional Provident Fund Commissioner.

ii) Defined Benefit Plan:

The liabilities in respect of gratuity and leave encashment are determined Using Projected Unit Credit Method with actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit & loss for the period in which they occur.

Contributions in respect of gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for Unrecognized past service cost and as reduced by the fair value of respective fund.

l) SEGMENT REPORTING:

The company identifies primary segments based on the nature of products and market catered by each segments for which separate financial information is available and for which operating profit/loss amounts are evaluated by the company.

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole. Segment-wise revenue, expenses, assets and liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the company as a whole and are not allocable to specific segment on reasonable basis have been included under ''unallocated revenue/ expenses/ assets/ liabilities.''

m) EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

n) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of cash flow statement comprise cash on hand and balance at Bank including fixed deposits with an original maturity period of less than three months and short term investments with an original maturity of three months or less.

o) TAXATION:

i. Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is virtual certainty that there will be sufficient future taxable income available to realize the assets. At each Balance-sheet date, recognized and unrecognized Deferred Tax Assets are reviewed.

p) Provision and Contingencies:

The Company creates a provision when there is 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 obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2012

A) ACCOUNTING CONVENTION:

The accompanying consolidated financial statements are prepared in accordance withIndian Generally Accepted Accounting Principles (GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India ("ICAI"), the provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non current classification of assets and liabilities.

b) USE OF ESTIMATES:

The preparation of consolidated financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

c) REVENUE RECOGNITION:

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

Revenue from sale of products is recognised on dispatch or appropriation of goods in accordance with the terms of sale and rewards of ownership have passed to the buyer. Sale of goods is recorded net of trade discounts, rebates, VAT/Sales Tax and excise duty.

Interest income is recognised on a time proportion basis considering the amount outstanding and applicable interest rate.

d) FIXED ASSETS & DEPRECIATION / AMORTISATION:

Fixed assets are stated at historical cost less accumulated depreciation. Costs include expenditure directly attributable to the acquisition of the asset. Borrowing costs directly attributable to the construction or production of qualifying assets are capitalised as part of the cost.

Intangible assets are stated at the consideration paid for acquisition less accumulated amortisation.

Cost of fixed assets not ready for use before the balance sheet date is disclosed as capital work-in-progress. Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date is disclosed under long term loans and advances.

Depreciation on assets acquired and used in old project is being calculated on Straight Line method basis and on assets acquired for new project (commissioned during March'2007) is calculated on Written Down Value Method basis.

e) IMPAIRMENT OF ASSET:

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment of the carrying amount of the Company's assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

f) INVENTORIES:

Inventories are valued at lower of cost or market value.

Cost of work-in-progress and finished goods are ascertained considering direct costs plus a share of manufacturing overheads. Cost of raw materials and packing materials is arrived at, by using FIFO Method.

g) INVESTMENTS:

Non-current investments are stated at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of investment, if any.

Current investments are carried at lower of cost and fair value determined on an individual investment basis.

h) BORROWING COSTS:

Cost of borrowed funds directly attributable to the acquisition or construction of qualifying assets has been capitalised and included in the cost of fixed assets till such assets are ready to be put to use. Other borrowing costs are recognised as expenses in the period in which they are incurred.

i) FOREIGN CURRENCY TRANSACTIONS:

i) Foreign currency transactions are recorded at the exchange rates prevailing at the time of the transaction.

ii) Monetary items representing assets and liabilities denominated in foreign currencies at the balance sheet date are translated at rates prevailing on balance sheet date.

iii) Investments in equity capital of company registered outside India are carried in the Balance Sheet at the rates prevailing on the date of transaction.

j) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged against the Profit for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to the fixed assets and is depreciated on the same basis as other fixed assets.

k) PROVISION FOR RETIREMENT BENEFITS:

Post- employment benefit plans

i) Defined Contribution Plan:

Contribution for provident fund are accrued in accordance with applicable Statutes and deposited with the Regional Provident Fund Commissioner.

ii) Defined Benefit Plan:

The liabilities in respect of gratuity and leave encashment are determined Using Projected Unit Credit Method with actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit & loss for the period in which they occur.

Contributions in respect of gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for Unrecognised past service cost and as reduced by the fair value of respective fund.

l) EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

m) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of cash flow statement comprise cash on hand and balance at Bank including fixed deposits with an original maturity period of less than three months and short term investments with an original maturity of three months or less.

n) TAXATION:

i. Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognised on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is reasonable certainty that the asset will be realised in future. At each Balance-sheet date, recognised and unrecognised Deferred Tax Assets are reviewed.


Mar 31, 2010

Accounting Convention:

The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India ("ICAI"), the provisions of the Companies Act, 1956.

a) USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future period.

b) REVENUE AND EXPENDITURE RECOGNITION:

Revenue and expenditure are recognized on accrual basis.

c) FIXED ASSETS & DEPRECIATION:

ALl Fixed Assets are stated at historical cost less depreciation. Depreciation on alL assets has been provided at rates and manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on assets acquired and used in old project is being calculated on Straight Line method basis and on assets acquired for new project (commissioned during March2007) is calculated on Written Down Value Method basis.

d) INVENTORIES:

Inventories are valued at lower of cost or market value.

Cost of work -in-progress and finished goods is ascertained considering direct costs plus a share of manufacturing overheads. Cost of raw materials and packing materials is arrived at, by using FIFO Method.

f) BORROWING COSTS:

Cost of borrowed funds for the project has been capitalized and included in the cost of fixed assets till commencement of production. Other borrowing costs are recognized as expenses in the period in which they are incurred.

g) FOREIGN CURRENCY TRANSACTIONS:

Expenditure/Income in foreign currencies are translated into Indian rupees at the rates prevailing on the date of occurrence of the transaction. At the year end all monetary foreign currency assets and liabilities are related to closing exchange rates. Gains or losses on settlement of foreign currency transactions during the period and from the year end restatement referred to above are recognized in the Revenue account.

h) IMPAIRMENT OF ASSET:

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment of the carrying amount of the Companys assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

i) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged against the Profit for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to the fixed assets and is depreciated on the same basis as other fixed assets.

j) PROVISION FOR RETIREMENT BENEFITS:

Post- employment benefit plans i) (i) Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable Statutes and deposited with the Regional Provident Fund Commissioner, ii) (ii) Defined Benefft Plan: The Liabilities in respect of gratuity and leave encashment are determined Using Projected Unit Credit Method with actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in the Profit & loss Account for the period in which they occur. Contributions in respect of gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for Unrecognized past service cost and as reduced by the fair value of respective fund.

k) TAXATION :

i. Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be realized in future. At each BaLance-sheet date, recognized and unrecognized Deferred Tax Assets are reviewed.

iii. Fringe Benefit Tax:

Tax on Fringe Benefits is measured as the specified rates on the value of Fringe Benefits in accordance with the provisions of the Section 115WC of the Income Tax Act, 1961. Accounting for Fringe Benefit Tax is done as per the Guidance note issued by ICAI. Due to change in law, no provision for FBT is made during the current year.

 
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