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Accounting Policies of Ind-Swift Laboratories Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES : -

1 BACKGROUND

Headquartered in Chandigarh, India, Ind-Swift Laboratories Ltd is a public limited company incorporated on 04 Jan, 1995 under the provision of companies Act, 2013. Company is global manufacturer of APIs, Intermediates and formulations (through group collaboration). Having commenced operations in 1997 as an API manufacturer, the Company continued to focus on this business domain as its key business driver.

2.0 STATEMENT OF COMPLIANCE

The standalone financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. For periods up to and including the year ended March 31,2017, the Company prepared its financial statements in accordance with the then applicable Accounting Standards in India (''previous GAAP'').

2.1 BASIS OF MEASUREMENT

The standalone financial statements have been prepared on the historical cost basis except for: -certain financial assets and liabilities.

2.2 PROPERTY PLANT & EQUIPMENT

2.2.1 COST OF PROPERTY PLANT & EQUIPMENT

All Property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are valued at cost/ revalued cost net of tax credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production/ready to use. Any asset transferred to assets held for sale is value at cost or NRV whichever is lower.

2.2.2 DEPRECIATION/AMORTIZATION

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line

method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation is provided on straight line method at the rates specified in schedule II of the Companies Act 2013 on pro rata basis and the assets having the value up to H5000 have been depreciated at the rate of 100%. The policy of company is to provide depreciation on the Buildings, Plant & Machinery and Other Fixed assets from the date of commercial production/ready to use.

2.2.3 INVESTMENT PROPERTY

Properties that is held for long-term rentals or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of the investment property is replaced, the carrying amount of the replaced part is derecognised.

Investment property are depreciated using the straight line method over their estimated useful lives.

On transition to Ind AS, the Group has elected to continue with the carrying value of its investment property recognised as at April 1,2016 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties.

2.2.4 INTANGIBLE ASSETS (OTHER ASSETS)

I ntangible Assets with definite useful lives are subject to amortization and are reviewed to determine whether there is any indication that carrying Value of these assets may not be

recoverable. Management judgment is required in the area of intangible assets loss particularly in assessing :

Whether an event has occurred that may indicate that the related assets values may not be recoverable or

Whether the carrying value of an intangible assets can be supported by the recoverable amount, being the fair value less costs to sell or net present value of future cash flows which are estimated based upon the continued use of the asset in the group.

Useful Lives of Intangible assets:

I ntangible assets related to R&D are amortised over the period of 5 years on straight line method.

2.2.5 LEASES

The Company''s lease asset classes consist primarily of land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether : (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases.

For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets

and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.

Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option. Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

2.3 BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

2.4 INVENTORIES

Inventories are valued at lower of cost and net realisable value, Cost includes all charges in bringing the goods to point of sale. Cost is determined as follows.

2.4.1 Raw Materials and stores and spares are valued on weighted average basis.

2.4.2 Work in Process is valued at estimated cost basis and an appropriate share of production overheads or net realisable value whichever is less.

2.4.3 Finished Goods are valued at cost and an appropriate share of production overheads or net realisable value whichever is less.

2.4.4 Stock in Trade are valued at weighted average basis.

2.5 REVENUE RECOGNITION

The Company derives revenues primarily from sale of API business.

Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and provides a

Five step application approach to be followed for revenue recognition.

1. Identify the contract(s) with a customer;

2. Identify the performance obligations;

3. Determine the transaction price;

4. Allocate the transaction price to the performance obligations;

5. Recognise revenue when or as an entity satisfies performance obligation.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, except for the agency services below, because it typically controls the goods or services before transferring them to the customer. Revenue excludes amounts collected on behalf of third parties. The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note XV and disclosures of transition approach along with impact of adoption of Ind AS 115 on financial statements are provided in Note 2.18

2.5.1 SALE OF GOODS

For sale of goods, revenue is recognised when control of the goods has transferred at a point in time i.e. when the goods have been delivered to the specific location (delivery). Following delivery, the customer has full discretion over the responsibility, manner of distribution, price to sell the goods and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Company when the goods are delivered to the customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. Payment is due within 0-180 days. The Company considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any).

2.5.2 CONTRACT BALANCES Trade receivables

A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

2.5.3 Cost to obtain a contract

The Company pays sales commission to its selling agents for each contract that they obtain for the Company. The Company has elected to apply the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included in advertisement and sales promotion expense under other expenses) because the amortization period of the asset that the Company otherwise would have used is one year or less.

Costs to fulfil a contract i.e. freight, insurance and other selling expenses are recognized as an expense in the period in which related revenue is recognised.

2.5.4 Other revenue streams

EXPORT & OTHER INCENTIVES

In case of sale made by the Company as Manufacturer, export benefits arising from Duty Entitlement Pass Book (DEPB), Merchandise Export Incentive Scheme, and Focus Market Scheme are recognised on accrual basis on fulfilment of eligibility criteria for availing the incentives and when there is no uncertainty in receiving the same. These incentives include estimated realisable values/benefits from special import licenses and benefits under specified schemes as applicable.

In case of sale made by the Company as Manufacturer, export benefits arising from Duty Drawback scheme, Rebate of State Levies (ROSL), and Rebate of State and Central Taxes and Levies (ROSCTL), are recognised on sale of such goods in accordance with the agreed terms and conditions with customers.

Revenue from exports benefits measured at the fair value of consideration received or receivable net of returns and allowances, cash discounts, trade discounts and volume rebates.

Obligation/entitlements on account of Advance Licenses Scheme for import of raw materials are not accounted for as income and correspondingly no expenses is booked at time of payment of custom duty. Custom duty amount of pending export obligations are shown as contingent liability by way of note.

Rendering of Services

Revenue from rendering of services is recognised when the performance obligation to render the services are completed as per contractually agreed terms.

Dividend

Revenue is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.

2.6 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been recognised in the year in which the contract has been cancelled/ matured. Monetary assets & current liabilities are translated at year end exchange rates. The resulting gain or loss on translation or settlement is recognised in the Profit& Loss Account except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilities are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

2.7 RETIREMENT BENEFITS

The retirement benefits of the employees include Gratuity, Provident Fund & Compensated absences.

Defined Benefit Plans for defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to

the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

- service cost (including current service cost,

past service cost, as well as gains and losses on curtailments and settlements);

- net interest expense or income; and

- remeasurement

The Group presents the first two components of defined benefit costs in statement of profit and loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Group''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Defined contribution plans which include contribution to the provident fund are recognised as expense when employees have rendered services entitling them to such benefits.

The compensated absences are provided on the basis of actuarial valuation of employees entitlement in accordance with company''s rules.

2.8 Share Based Payment Arrangements

Share-based payment transactions of the Company Equity-settled share-based payments to employees are measured at the Fair value of the equity instruments at the grant date. The fair value determined at

the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

2.9 TAXATION

2.9.1 Current tax

Current tax is the tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the standalone statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

2.9.2 Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set-off against future tax liability. Accordingly, MAT is recognised as deferred tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.

2.9.3 Current and deferred tax for the year

Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

2.10 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of a past event, that probably requires an outflow of resources and a reliable estimate can be made to settle the amount of obligation. Provision is discounted to its present value wherever required and is determined based on the last estimate required to settle the obligation at the year end.

These are reviewed at each year end and adjusted to reflect the best current estimate.

Contingent liabilities are disclosed in notes when there is a possible obligation that rises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets are neither recognized nor disclosed in the financial statements.

2.11 GOVERNMENT GRANTS

Government grants are initially recognised as income at fair value if there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant;

- In case of capital grants, they are then recognised in Statement of Profit and Loss as other income on a systematic basis over the useful life of the asset.

- In case of grants that compensate the Group for expenses incurred are recognised in Consolidated Statement of Profit and Loss on a systematic basis in the periods in which the expenses are recognised.

2.12 FINANCIAL INSTRUMENTS

2.12.1 Investment in subsidiaries, associates and joint ventures

The Company has accounted for its investments in subsidiaries, associates and joint ventures at cost less impairment.

2.12.2 Other financial assets and financial liabilities

Other financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.

I nitial recognition and measurement: Other financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at

fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in statement of profit and loss. Subsequent measurement: Financial assets at amortised cost. Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.

Financial assets at fair value through Profit & loss Account

Financial assets are measured at fair value through profit or loss unless it measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.

Financial liabilities Recognition of Financial liabilities

Financial liabilities are measured at amortised cost using effective interest rate method. For trade and other payables maturing within

one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

De-Recognition of Financial liabilities

The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognised in profit or loss account. Further the company applies extinguishment accounting/modification accounting as per IND-AS 109.

2.12.3 Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.

2.13 IMPAIRMENT OF ASSETS

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, Corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in statement of profit and loss.

2.14 TRADE RECEIVABLES & ADVANCES

Sundry debtors outstanding for more than three years at the end of Balance Sheet date will be written off from the books of accounts except disputed debtors having matters pending under different Courts.

Other advances and related party balances outstanding for more than 3 years are reviewed by the management at the end of every financial year and are written off as per the judgment of the management.

2.15 OPERATING CYCLE

Based on the nature of products / activities of the Group and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Group has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

2.16 KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company''s accounting policies, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

2.16.1 Useful lives of property, plant and equipment and Intangible assets

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This assessment may result in change in the depreciation expense in future periods.

2.16.2 Employee Benefits

The cost of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

2.16.3 Litigations

The Company is a party to certain commercial disputes and has also received notification of claims for significant amounts. There are number of factors that may affect the ultimate outcome in respect of this matter and accordingly, it is difficult to assess the impact of these disputes with accuracy.

2.17 OTHER ACCOUNTING POLICIES

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.


Mar 31, 2018

I SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1 STATEMENT OF COMPLIANCE

The standalone financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with the then applicable Accounting Standards in India (‘previous GAAP’). These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer Note XLIV(B) for the explanations of transition to Ind AS including the details of first-time adoption exemptions availed by the Company.

2 BASIS OF MEASUREMENT

The standalone financial statements have been prepared on the historical cost basis except for: -certain financial assets and liabilities.

3 PROPERTY PLANT & EQUIPMENT 3.1COST OF PROPERTY PLANT & EQUIPMENT

All Property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are valued at cost/revalued cost net of tax credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production / ready to use.

3.2 DEPRECIATION /AMORTIZATION

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation is provided on straight line method at the rates specified in schedule II of the Companies Act 2013 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortized over the period of lease. The policy of company is to provide depreciation on the Buildings , Plant & Machinery and Other Fixed assets from the date of commercial production/ ready to use.

3.3 INVESTMENT PROPERTY

“Properties that is held for long-term rentals or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of the investment property is replaced, the carrying amount of the replaced part is derecognised. Investment property are depreciated using the straight line method over their estimated useful lives.

On transition to Ind AS, the Group has elected to continue with the carrying value of its investment property recognised as at April 1, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties.”

3.4 INTANGIBLE ASSETS (OTHER ASSETS)

“Intangible Assets with definite useful lives are subject to amortization and are reviewed to determine whether there is any indication that carrying Value of these assets may not be recoverable . Management judgment is required in the area of intangible assets loss particularly in assessing :

Whether an event has occurred that may indicate that the related assets values may not be recoverable or

Whether the carrying value of an intangible assets can be supported by the recoverable amount , being the fair value less costs to sell or net present value of future cash flows which are estimated based upon the continued use of the asset in the group .

4 BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

5 INVENTORIES

Inventories are valued as under :

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis Work in Process is valued at estimated cost basis and an appropriate share of production overheads or net realisable value whichever is less.

Finished Goods are valued at cost and an appropriate share of production overheads or net realisable value whichever is less and is inclusive of excise duty.

6 REVENUE RECOGNITION

Revenue is measured at fair value of the consideration received or receivable. Sale of goods is recognised when goods are supplied and are recorded net of rebates ,GST and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6.1 SALE OF GOODS

Revenue from the sale of goods is recognised when the following conditions are satisfied:

1. The Company has transferred to the buyer the significant risks and rewards of ownership of the goods to the buyer as per the terms of arrangement with buyer;

2. The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

3. The amount of revenue can be measured reliably;

4. It is probable that the economic benefits associated with the transaction will flow to the Company;

5. the costs incurred or to be incurred in respect of the transaction can be measured reliably.

6.2 EXPORT INCENTIVES

“Export incentives are accrued for based on fulfilment of eligibility criteria for availing the incentives and when there is no uncertainty in receiving the same. These incentives include estimated realisable values/ benefits from special import licenses and benefits under specified schemes as applicable. Obligation / entitlements on account of Advance Licenses Scheme for import of raw materials are not accounted for as income and correspondingly no expenses is booked at time of payment of custom duty. Custom duty amount of pending export obligations are shown as contingent liability by way of note. “

6.3 RENDERING OF SERVICES

Revenue from contract manufacturing is recognised based on the services rendered in accordance with the terms of the contract

7 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been recognised in the year in which the contract has been cancelled/ matured. Monetary assets & current liabilities are translated at year end exchange rates. The resulting gain or loss on translation or settlement is recognised in the Profit& Loss Account except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilities are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

8 RETIREMENT BENEFITS

The retirement benefits of the employees include Gratuity ,Provident Fund & Compensated absences.

Defined Benefit Plans for defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

- net interest expense or income; and

- remeasurement

The Group presents the first two components of defined benefit costs in statement of profit and loss in the line item ‘Employee benefits expenseRs. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Defined contribution plans which include contribution to the provident fund are recognised as expense when employees have rendered services entitling them to such benefits..

The compensated absences are provided on the basis of actuarial valuation of employees entitlement in accordance with company’s rules.

9 SHARE BASED PAYMENT ARRANGEMENTS

Share-based payment transactions of the Company Equity-settled share-based payments to employees are measured at the Fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

10 TAXATION

10.1 Current tax

Current tax is the tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the standalone statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

10.2 Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set-off against future tax liability. Accordingly, MAT is recognised as deferred tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.

10.3 Current and deferred tax for the year

Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

11 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

“A provision is recognized when there is a present obligation as a result of a past event, that probably requires an outflow of resources and a reliable estimate can be made to settle the amount of obligation. Provision is discounted to its present value wherever required and is determined based on the last estimate required to settle the obligation at the year end. These are reviewed at each year end and adjusted to reflect the best current estimate.

Contingent liabilities are disclosed in notes when there is a possible obligation that rises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets are neither recognized nor disclosed in the financial statements.”

12 GOVERNMENT GRANTS

“Government grants are initially recognised as income at fair value if there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant;

- In case of capital grants, they are then recognised in Statement of Profit and Loss as other income on a systematic basis over the useful life of the asset.

- In case of grants that compensate the Group for expenses incurred are recognised in Consolidated Statement of Profit and Loss on a systematic basis in the periods in which the expenses are recognised.”

13 FINANCIAL INSTRUMENTS

13.1 Investment in subsidiaries, associates and joint ventures

The Company has accounted for its investments in subsidiaries, associates and joint ventures at cost less impairment.

13.2 Other financial assets and financial liabilities

“Other financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.

Initial recognition and measurement: Other financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in statement of profit and loss.

Subsequent measurement: Financial assets at amortised cost. Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.”

13.2.1 Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.

13.2.2 Financial assets at fair value through Profit & loss Account

“Financial assets are measured at fair value through profit or loss unless it measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.”

13.2.3 Financial liabilities

13.2.3.1 Recognition of Financial liabilities

Financial liabilities are measured at amortised cost using effective interest rate method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

13.2.3.2 De-Recognition of Financial liabilities

The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognised in profit or loss account. Further the company applies extinguishment accounting/modification accounting as per IND-AS 109.

13.3 Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.

14 IMPAIRMENT OF ASSETS

“At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, Corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in statement of profit and loss.”

15 TRADE RECEIVABLES & ADVANCES

“Sundry debtors outstanding for more than three years at the end of Balance Sheet date will be written off from the books of accounts except disputed debtors having matters pending under different Courts.

Other advances and related party balances outstanding for more than 3 years are reviewed by the management at the end of every financial year and are written off as per the judgment of the management.”

16 OPERATING CYCLE

Based on the nature of products / activities of the Group and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Group has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

17 KEY SOURCES OF ESTIMATION UNCERTAINTY

“In the application of the Company’s accounting policies, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.”

17.1 Useful lives of property, plant and equipment and Intangible assets

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This assessment may result in change in the depreciation expense in future periods.

17.2 Employee Benefits

The cost of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the longterm nature of these plans, such estimates are subject to significant uncertainty.

17.3 Litigations

As explained in note 39.1, the Company is a party to certain commercial disputes and has also received notification of claims for significant amounts. There are number of factors that may affect the ultimate outcome in respect of this matter and accordingly, it is difficult to assess the impact of these disputes with accuracy.

18 OTHER ACCOUNTING POLICIES

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

B) FIRST-TIME ADOPTION - MANDATORY EXCEPTIONS, OPTIONAL EXEMPTIONS

1. OVERALL PRINCIPLE

The Company has prepared the opening standalone balance sheet as per Ind AS of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

2. DERECOGNITION OF FINANCIAL ASSETS AND FINANCIAL

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

3. SHARE-BASED PAYMENT TRANSACTIONS

Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2016.

4. DEEMED COST FOR PROPERTY, PLANT AND EQUIPMENT INVESTMENT PROPERTY, AND INTANGIBLE ASSETS

The Company has elected to continue with the carrying value of all items of its plant and equipment, investment property, and intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

5. GOVERNMENT GRANT

Pursuant to Ind AS 101 “First-time Adoption of Indian Accounting Standards”, the Company has opted the exemption to use the carrying amount of the Government Loan at a rate below market rate of interest at the date of transition to Ind AS, as the carrying amount of the Loan in the consolidated financial statements.

6. LONG TERM FOREIGN CURRENCY MONETARY ITEMS

Pursuant to Ind AS 101 “First-time Adoption of Indian Accounting Standards”, the Company has opted the exemption given in paragraph D13AA of Appendix D to Ind AS 101 allowing to continue the policy adopted for accounting for exchange differences arising from translation of such longterm foreign currency monetary items recognised in the financial statements for the period ending immediately before beginning of the first Ind AS financial reporting period as per the previous GAAP

Notes to the reconciliations :-

1. Under previous GAAP treatment of de-recognition of financial liability was not specifically provided, but now as per Ind-AS 109, The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognised in Profit & Loss Account. This change has increased total equity by Rs. 2841.82 Lacs, Consequently Fixed assets as on 31 March, 2017 has been increased by the same amount.

2. Under previous GAAP actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurernent of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under lnd AS instead of the statement of profit and loss.

The actuarial loss for gratuity for the year ended net of tax for March 31, 2017 were ‘2.65 Lacs. This change does not affect total equity, but there is an increase in profit before tax of ‘3.83 Lacs and in total profit of ‘2.65 Lacs for the year ended March 31, 2017.


Mar 31, 2016

In the absence of any formal execution of Balance confirmation agreement with Asset reconstruction companies, the company has considered them as Noncurrent liability.

The same is not being included in the calculation of maturity profile.

Notes :-

A) Bank borrowings for working capital Rs. 469.52 crores (P.Y. Rs. 419.37Crores) from S.B.I., Bank of India, S.B.O.P., I.D.B.I., S.I.D.B.I. are secured by :-

(1) A first ranking pari passu charge over the entire current assets on the borrower in favour of " Security trustee 2 " for the benefit of the respective lenders and

(2) A second ranking pari passu charge over the entire fixed assets ( both present and future ) of the borrower by way of an equitable mortgage, in favor of " Security trustee 1 " for the benefit of the respective lenders and

(3) Unconditional and irrevocable on demand personal guarantee from each promoter to the extent of their respective net worth in the form acceptable to the lenders and the security Trustee 1 in the favour of the " Security Trustee 1" for benefit of the respective lenders and

(4) Unconditional and irrevocable on the demand corporate guarantee from each of the affiliate companies in the form acceptable to the lenders and the "Security Trustee 1" in the favour of the "Security Trustee 1" for the benefit of the respective lenders and

(5) Pledge of 100% Promoters Group Shareholding in the borrower (50.58% of the fully diluted equity share capital of the borrower as on the effective date), free of all encumbrances , including additional share acquired by the promoters on infusion of equity in the Borrower in accordance with the terms of this Agreements, and the CDR Package in the favour of the "Security Trustee 1" and Security Trustee 2" for the benefit of all respective lenders.

B) (i) Term Loan Rs. 538.36 crores ( P.Y. 553.85 crores) from State Bank of India including State Bank of Indore ( as now merged with SBI ), Edelweiss ARC Ltd. (Central Bank of India, State Bank of Travancore & Allahabad Bank), State Bank of Patiala, Bank of India (including ECB), Canara Bank, Bank of India, Phoenix ARC Private Limited (Catholic Syrian Bank), Export Import Bank of India, IDBI Bank, Nouam Financial Consultants Private Ltd. (ICICI Bank Limited), Asset Reconstruction Company (India) Ltd. (State Bank of Hyderabad),SIDBI FITL are secured by :-

(1) A first ranking pari passu charge over the entire fixed assets ( both present and future ) of the borrower by way of an equitable mortgage, in favour of " Security trustee 1 " for the benefit of the respective lenders and

(2) A second ranking pari passu charge over the entire current assets on the borrower in favour of " Security trustee 2 " for the benefit of the respective lenders and

(3) Unconditional and irrevocable on demand personal guarantee from each promoter to the extent of their respective net worth in the form acceptable to the lenders and the security Trustee 1 in the favour of the " Security Trustee 1" for benefit of the respective lenders and

(4) Unconditional and irrevocable on the demand corporate guarantee from each of the affiliate companies in the form acceptable to the lenders and the "Security Trustee 1" in the favour of the "Security Trustee 1" for the benefit of the respective lenders and

(5) Pledge of 100% Promoters Group Shareholding in the borrower (50.58% of the fully diluted equity share capital of the borower as on the effective date), free of all encumbrances , including additional share acquired by the promoters on infusion of equity in the Borrower in accordance with the terms of this Agreements, and the CDR Package in hte favour of the "Security Trustee 1" and Security Trustee 2" for the benefit of all respective lenders.

(ii) ECB Rs. 240.69 crores ( P.Y. 227.12 Crores) from Bank of Baroda and DEG. Rupee term loan from Edelweiss ARC Ltd.(IFCI) Rs. 15.94 crores ( P.Y. Rs. 15.94 crores ), L&T Rs. 16.54 crores ( P.Y.19.13 crores ), M&M Rs. 24.50 (P.Y. 24.50 ) are secured by first ranking pari passu equitable charge on the moveable and immovable properties admeasuring 68 bighas & 13 biswas situated at village Behra & village Bhagwanpura Plot No E-5, Industrial Focal Point, Phase II , Mohali in the state of Punjab together with all buildings & structures, Plant & Machinery thereon and personal guarantees of promoter directors to the extent of their respective net worth.

(iii) Vehicle loans Rs 0.02 Crores (P.Y. 0.23crores) from HDFC, ICICI and NBFC are secured against hypothecation of the vehicles under the hire purchase agreement.

(iv) Other term loan & advances Rs. 3.45 crores ( P.Y. 4.45 crores ) includes ICICI Home Loan in the name of Mr. N.R. Munjal, which is secured against the office premises in Mumbai and another Term loan from Technology Development Board is secured by way of charges on movable fixed assets & personal guarantee of Shri N.R. Munjal.

During the year, Allahabad Bank, Central Bank of India and IFCI have assigned their Loans to Edelweiss ARC Ltd; ICICI Bank has assigned its Loan to Nouam Financial Consultants Private Ltd. and State Bank of Hyderabad has assigned its Loan to Asset Reconstruction Company (India) Ltd. Few of these assignments of Loans has not been registered by the concerned assignees with the ROC.

The above mentioned members of CDR & Non CDR Banks have transferred their entire loan portfolios amounting to Rs. 27743.91 lakhs (P.Y.-Rs.12119.22 Lakhs) to their respective asset reconstruction companies. The balance confirmation in this regard is still awaited.

SBI & SIDBI Banks have ceased charging interest in their statement of accounts and accordingly the company has charged provisional interest in the books for the year ended 31st March 2016.

The balance confirmation for DEG Kfin Banken Group (DEG Loan), Bank of Baroda, SIDBI & TDB are unavailable, in the absence of same provisional interest is being booked for the year ended 31st March 2016.

The company has charged total interest amounting to Rs. 2000.90 Lakhs in the books of the company on provisional basis for the year ending

31.03.2016.

In the books of accounts the loan with Mahindra & Mahindra stands disputed and pending with Hon''ble Punjab & Haryana High Court. Hence, no interest is being booked for the year ended 31st March 2016.

The Term loan of L& T Finance has been restructured on 27.01.2016. As per the new restructured Terms a sum of Rs 2142.00 Lakhs is to be paid in 29 equated installments towards full and final settlement. The impact of the same has been dealt in the books of accounts for the year ending 31.03.2016.

(i) SBI & SIDBI Banks have ceased charging interest on working capital accounts and accordingly the company has charged provisional interest amounting to Rs. 4948.57 Lacs in the books for the year ended 31st March 2016.

(ii) The Balance confirmation of Bills Discounting arrangement of SIDBI is unavailable.

FIXED DEPOSITS RESTRUCTURING:

Under the provisions of the Companies Act, 2013, the Company has got its Fixed Deposit Scheme restructured vide its order No. C.P 27/01/2013, Dated 30.09.2013 through Hon''ble Company Law Board. The Company has been granted extension of time in repayment of these deposits.

Few of the FD holders have however approached the courts for the repayment of their Fixed Deposits and the matter is still pending in the courts as on 31.03.2016.

i) Statutory Liabilities include TDS/TCS payable ,GTA payable ,ESI Payable, PF payable, Labour welfare Payable, Excise duty/Sales Tax/ Service Tax payable.

ii) Expenses payable include Salary ,wages, Bonus, EL, Audit Fees, Electricity Exp. payable.

iii) During the year under review, the promoters contribution amounting to Rs. 18.08 crores(includes Rs. 6.51 crores received in FY 2015-16) which is yet to be converted into equity shares pursuant to its approved CDR package. Till the conversion to equity shares, the amount is treated as Share application money as on 31.03.2016.

The Company could not issue shares against this promoters contribution as company’s application for pre-approval for allotment of shares in terms of the regulation 28 of the SEBI (LODR) regulations, 2015 was pending with the exchanges as on 31.03.2016.

i) During the current financial year the company has further revalued its Land situated on Dera bassi Plant by the approved valuer appointed by the company resulting due to decreased Market value of land by Rs. 18.78 Crore. While revaluing the said Land the Company has not considered for revaluation the cost of Land amounting to Rs. 13.79 crore held on power of attorney.

The valuation reserve of land freehold is decrease by Rs. 18.78 Crores as on 31.03.2016.

ii) Previously Company has revalued its assets comprising of Land, Plant & Machinery of Derabassi Unit and Jammu plant by the approved External valuer to reflect the market value and accordingly the appreciation amounting to Rs. 10138.73, Rs. 14330.37 & Rs. 14231.00 lacs (excluding land and Plant and machinery of Jammu ) respectively have been credited to Capital Reserve Account (Re-valuation Reserve A/c) as on 31.03.2007, 08.06.2011 & 30.06.2012.

iii) Depreciation on revalued assets amounting to Rs. 1590.35 Lacs (P.Y. Rs. 1586.00) has been provided during the year from the Profit and Loss Account as per the Schedule II of Companies Act 2013& the same is transferred from Revaluation Reserve to General Reserves.

iv) Office Buildings includes Mumbai Office Buildings Rs. 330.68 Lacs which was purchased in the name of the Managing Director of the Company out of which one building amounting to Rs. 41.46 Lacs is mortgaged with Nouam Financial consultants Pvt Ltd. The Company has entered into an “Agreement to Sell” and has taken GPA from the Managing Director.

The property is yet to be registered in the name of Company.

v) Freehold land includes Rs.13.79 crores and Flats Rs. 14.58 Crore for which agreement to sell and GPA in favour of the company has been executed and the same have been put to use.

The Freehold Land & Flats are yet to be registered /transferred in the name of the Company.

vi) Capital Work in Progress (Tangible) includes :

Expenses pending capitalization Rs. 1972.76 Lacs (Previous Year Rs. 3256.49 lacs).

vii) The interest which has been capitalized in Tangible Assets is conformity with AS - 16.

The amount paid as managerial remuneration has exceeded the limits prescribed under Section 196,197 and 198 read with Part II of Schedule V to the Companies Act, 2013 by Rs 1.2 crores as the Company is still into losses.

The Company however filed application to obtain approval from Central Government in respect to excess remuneration paid for FY 2015-16. Pending outcome of the application filed with the Central Government, no adjustments have been made in the Financial Statements.

NOTE NO. XXIII : In accordance with Accounting Standard 18, ''Related Party Disclosures'', issued by the Institute of Chartered Accountants of India, the Company has compiled the following information :

a. List of related parties and their relationship

Subsidiary Companies Ind Swift Laboratories Inc. USA

Meteoric Life Science Pte Ltd. ,Singapore Ind-Swift Middle East FZE (UAE)

Associate Companies Fortune (India) Constructions Ltd.

Key Management Personnel / Directors Sh. N.R. Munjal, Vice Chairman-cum-Managing Director

Sh. Himanshu Jain, Jt. Managing Director

Mr. Rishav Mehta, Executive Director

Mr. N.K. Bansal, Chief Financial Officer

Sh. S.R. Mehta, Director

Dr. V.R. Mehta, Director

Dr. G. Munjal, Director

Sh. Pardeep Verma, GM-Corp. Affairs & CS

Others (Entities in which KMP or their relative is a Ind Swift Limited

Director; or KMP or their relative exercises control Essix Biosciences Limited

Halcyon Life Sciences Pvt Ltd.

Mansa Print & Publishers Limited

Swift Fundamental Research & Education Society

3M Advertisers & Publishers Ltd.

Punjab Renewable Energy Pvt Ltd.

Mohali Green Environment Private Limited Saidpura Envirotech Private Limited Consummate Pharmaceuticals Private Limited Nimbua Green Field (Punjab) Limited Dashmesh Medicare Private Limited AKJ Portfolios Pvt. Ltd. & NRM Portfolios Pvt. Ltd GM Portfolios Pvt. Ltd. & VRM Portfolios Pvt Ltd.

VKM Portfolios Pvt Ltd. & SRM Portfolios Pvt Ltd.

Integral Buildcon Private Limited Vibrant Agro Industries Limited Hakim Farayand Chemi Co.(Iran)

B.M. Cosmed Private Limited


Mar 31, 2015

1. SYSTEM OF ACCOUNTING

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the applicable Accounting Standards notifi financial statements have been prepared under the historical cost convention and on the basis of going concern.

2. FIXED ASSETS & DEPRECIATION

a. COST OF FIXED ASSETS

All Fixed Assets are valued at cost/revalued cost net of Cenvat credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production / ready to use.

b. DEPRECIATION / AMORTISATION

Depreciation is provided on straight line method at the rates specified in schedule II of the Companies Act 2013 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortized over the period of lease. The policy of company is to provide depreciation on the Buildings , Plant & Machinery and Other Fixed assets from the date of commercial production/ ready to use.

c. INTANGIBLE ASSETS (OTHER ASSETS)

Cost of product development for which the company becomes entitled to a Patent or DMF filed with regulatory authorities is recognized as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired after 31.3.2008 and onwards in ten subsequent years from the year in which these are acquired.

3. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

4. INVENTORIES

Inventories are valued as under :

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis except from last year onwards valuation of the Menthol has been made at cost or Market price whichever is less.

Work in Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

5. RECOGNITION OF INCOME AND EXPENDITURE

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been recognised in the year in which the contract has been cancelled/ matured. Foreign currency denominated current assets & current liabilities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilities are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7. COMMODITY EXCHANGE TRANSACTIONS

Commodity Exchange Transaction are recorded at the commodity exchange rate prevailing on the transaction date. Contracts remaining outstanding at the year end have been recorded as per year end rate and resultant profit and loss arising from outstanding contracts are recognised accordingly in the Profit and Loss Account.

8. RETIREMENT BENEFITS

The retirement benefits of the employees include Gratuity ,Provident Fund & Leave Encashment. The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contribution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with company's rules.

9. EMPLOYEES STOCK OPTION SCHEME

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight-line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 "on Share Based Payments" issued by the ICAI.

10. CURRENT & DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deffered tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deffered tax assets is recognised and carried forward only to the extent that there is a virtual certainity that the asset will be realised in future.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet. The same will be charged to profit & loss account in coming years as per the provisions of Section 115JB of Income Tax Act, 1961.

11. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of a past event, that probably requires an outflow of resources and a reliable estimate can be made to settle the amount of obligation. Provision is not discounted to its present value and is determined based on the last estimate required to settle the obligation at the year end. These are reviewed at each year end and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

12. GOVERNMENT SUBSIDY

The policy of company is to account for the Government Subsidy on actual receipt basis.

13. EXPORT INCENTIVES

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw materials are not accounted for but given by way of note.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset & treated as expenditure in the year of import/ utilisation of license.

14. INVESTMENTS

Long Term Investments are being valued at cost.

Current Investments are carried at lower of cost & fair value, determined on an individual investment basis.

15. IMPAIRMENT OF ASSETS

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the asset's net sales price or present value.

16. TRADE RECEIVABLES

Sundry debtors more than three years at the end of Balance Sheet date will be written off from the books of accounts except those debtors pertaining to related parties ands disputed debtors having matter pending under different Courts.

17. OTHER ACCOUNTING POLICIES

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.


Mar 31, 2014

1. SYSTEM OF ACCOUNTING

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the applicable Accounting Standards notified under section 211 (3C) and the other relevant provision of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on the basis of going concern.

2. FIXED ASSETS & DEPRECIATION

a. COST OF FIXED ASSETS

All Fixed Assets are valued at cost/revalued cost net of cenvat credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production / ready to use.

b. DEPRECIATION /AMORTISATION

Depreciation is provided on straight line method at the rates specified in schedule XIV of the Companies Act 1956 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortised over the period of lease. The policy of company is to provide depreciation on the Buildings, Plant & Machinery and Other Fixed assess from the date of commercial production/ ready to use.

c. INTANGIBLE ASSETS (OTHER ASSETS)

Cost of product development for which the company becomes entitled to a Patent or DMF filed with regulatory authorities is recognised as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired after 31.3.2008 and onwards in ten subsequent years from the year in which these are acquired.

3. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

4. INVENTORIES

Inventories are valued as under :

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis except from this year onwards valuation of the Menthol has been made at cost or Market price whichever is less.

Work in Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

5. RECOGNITION OF INCOME AND EXPENDITURE

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been recognised in the year in which the contract has been cancelled/ matured. Foreign currency denominated current assets & current liabilities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilities are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7. COMMODITY EXCHANGE TRANSACTIONS

Commodity Exchange Transaction are recorded at the commodity exchange rate prevailing on the transaction date. Contracts remaining outstanding at the year end have been recorded as per year end rate and resultant profit and loss arising from outstanding contracts are recognised accordingly in the profit and loss account.

8. RETIREMENT BENEFITS

The retirement benefits of the employees include Gratuity ,Provident Fund & Leave Encashment . The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contribution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with company''s rules.

9. EMPLOYEES STOCK OPTION SCHEME

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight-line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 " on Share Based Payments" issued by the ICAI.

10. CURRENT & DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deffered tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deffered tax assets is recognised and carried forward only to the extent that there is a virtual certainity that the asset will be realised in future.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet. The same will be charged to profit & loss account in coming years as per the provisions of Section 115JB of Income Tax Act, 1961.

11. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognised when there is a present obligation as a result of a past event, that probably requires an outflow of resources and a reliable estimate can be made to settle the amount of obligation. Provision is not discounted to its present value and is determined based on the last estimate required to settle the obligation at the year end. These are reviewed at each year end and adjusted to reflect the best current estimate. Contingent liabilities are not recognised but disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

12. GOVERNMENT SUBSIDY

The policy of company is to account for the Government Subsidy on actual receipt basis.

13. EXPORT INCENTIVES

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw materials are not accounted for but given by way of note.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset & treated as expenditure in the year of import/ utilisation of license.

14. INVESTMENTS

Long Term Investements are being valued at cost Current Investments are carried at lower of cost & fair value, determined on an individual investment basis.

15. IMPAIREMENT OF ASSETS

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the asset''s net sales price or present value.

16. OTHER ACCOUNTING POLICIES

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.


Mar 31, 2013

1. SYSTEM OF ACCOUNTING

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the applicable Accounting Standards inotified under section 211 (3C) and the other relevant provision of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on the basis of going concern.

2. FIXED ASSETS & DEPRECIATION a COST OF FIXED ASSETS

All Fixed Assets are valued at cost/revalued cost net of cenvat credit wherever eligible. Cost includes all expenses andborrowing cost attributable to the project till the date of commercial production / ready to use.

b DEPRECIATION/AMORTISATION

Depreciation is provided on straight line method at the rates specified in schedule XIV of the Companies Act 1956 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortised over the period of lease. The policy of company is to provide depreciation on the Buildings , Plant & Machinery and Other Fixed assests from the date of commercial production/ready to use.

c INTANGIBLE ASSETS (OTHER ASSETS)

Cost of product development for which the company becomes entitled to a Patent or DMF filed with regulatory authorities is recognised as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired after 31.3.2008 and onwards in eight subsequent years from the year in which these are acquired.During the year, the policy has been changed retrospectively for the assets acquired after 31.03.2008 and onwards for ammortisation period from eight to ten subsequent years and the effect of the same has been considered appropriately.

3. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition,construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

4. INVENTORIES

Inventories are valued as under:

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis.

Work in Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

5. RECOGNITION OF INCOME AND EXPENDITURE

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been recognised in the year in which the contract has been cancelled/ matured. Foreign currency denominated current assests & current liablities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilties are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7. COMMODITY EXCHANGE TRANSACTIONS

Commodity Exchange Transaction are recorded at the commodity exchange rate prevaling on the transaction date. Contracts remaining outstanding at the year end have been recorded as per year end rate and resultant profit and loss arising from outstanding contracts are recognised accordingly in the profit and loss account.

8. RETIREMENT BENEFITS

The retirement benefits of the employees include Gratuity,Provident Fund & Leave Encashment. The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contirbution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with company''s rules.

9. EMPLOYEES STOCK OPTION SCHEME

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight-line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 "on Share Based Payments" issued by the ICAI.

10. CURRENT & DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deffered tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deffered tax assets is recognised and carried forward only to the extent that there is a virtual certainity that the asset will be realised in future.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet. The same will be charged to profit & loss accountin coming years aspertheprovisionsofSection 115JB of Income Tax Act, 1961.

11. PROVISION, CONTINGENT LIABILITIES AND CONTIGENT ASSETS

Aprovision is recognised when there is a present obligation as a result of a past event, that probably requires an outflow of resources and a reliable estimate can be made to settle the amount of obligation. Provision is not discounted to its present value and is determined based on the last estimate required to settle the obligation at the year end. These are reviewed at each year end and adjusted to reflect the best current estimate. Contingent liabilities are not recognised but disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

12. GOVERNMENT SUBSIDY

The policy of company is to account for the Government Subsidy on actual receipt basis.

13. EXPORT INCENTIVES

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw materials are not accounted for but given by way ofnote.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset& treated as expenditure in the year of import/utilisation of license.

14. INVESTEMENTS

Long Term Investements are being valued at cost Current Investments are carried at lower of cost & fair value,determined on an individual investment basis.

15. IMPAIREMENT OF ASSETS

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the asset''s net sales price or present value.

16. OTHER ACCOUNTING POLICIES

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.


Mar 31, 2012

1 SYSTEM OF ACCOUNTING

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on the basis of going concern.

2 FIXED ASSETS & DEPRECIATION

a COST OF FIXED ASSETS

All Fixed Assets are valued at cost/revalued cost net of cenvat credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production / put to use.

B DEPRECIATION /AMORTISATION

Depreciation is provided on straight line method at the rates specified in schedule XIV of the Companies Act 1956 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortised over the period of lease. The policy of company is to provide depreciation on the Buildings , Plant & Machinery and Other Fixed assets from the date of commercial production/ put to use.

C INTANGIBLE ASSETS (OTHER ASSETS)

Cost of product development for which the company becomes entitled to a Patent or DMF fled with regulatory authorities is recognised as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired after 31.3.2008 and onwards in eight subsequent years from the year in which these are acquired.

3 BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

4 INVENTORIES

Inventories are valued as under :

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis.

Work-in-Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

5 RECOGNITION OF INCOME AND EXPENDITURE

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been stated on prorata basis over the terms of the contract. Foreign currency denominated current assets & current liabilities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilities are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7 COMMODITY EXCHANGE TRANSACTIONS

Commodity Exchange Transaction are recorded at the commodity exchange rate prevailing on the transaction date. Contracts remaining outstanding at the year end have been recorded as per year end rate and resultant Profit and loss arising from outstanding contracts are recognised accordingly in the Profit and loss account.

8 RETIREMENT BENEFITS

The retirement Benefits of the employees include Gratuity ,Provident Fund & Leave Encashment . The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contribution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with company's rules.

9 EMPLOYEES STOCK OPTION SCHEME

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight- line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 " on Share Based Payments" issued by the ICAI.

10 CURRENT & DEFERRED TAX

The provision for current tax is made at the actual rate applicable for the income of the year as given under the Income Tax Act, 1961. However deferred tax is made at the rate applicable to the subsequent financial year.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet . The same will be charged to Profit & loss account in coming years as per the provisions of Section 115JB of Income Tax Act, 1961.

11 CONTINGENT LIABILITIES

The company has made the provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Contingent Liabilities, barring frivolous claims , are disclosed and those liablities which are possible of maturing are provided for.

12 GOVERNMENT SUBSIDY

The policy of company is to account for the Government Subsidy on actual receipt basis.

13 EXPORT INCENTIVES

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw materials are not accounted for but given by way of note.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset & treated as expenditure in the year of import/utilisation of license.

14 INVESTEMENTS

Long Term Investments are being valued at cost

Current Investments are carried at lower of cost & fair value, determined on an individual investment basis.

15 IMPAIREMENT OF ASSETS

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the asset's net sales price or present value.

16 OTHER ACCOUNTING POLICIES

Accounting Policies not Specifically referred to are in accordance with generally accepted accounting principles.


Mar 31, 2011

1 System of Accounting

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on the basis of going concern.

2 Fixed Assets & Depreciation a Cost of Fixed Assets

All Fixed Assets are valued at cost/revalued cost net of cenvat credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commercial production / put to use.

b Depreciation /Amortisation

Depreciation is provided on straight line method at the rates specified in schedule XIV of the Companies Act 1956 on pro rata basis and the assets having the value upto Rs.5000 have been depreciated at the rate of 100%. Lease hold Land is amortised over the period of lease. The policy of company is to provide depreciation on the Buildings , Plant & Machinery and Other Fixed assests from the date of commercial production/ put to use.

c Intangible Assets (Other Assets)

Cost of product development for which the company becomes entitled to a Patent or DMF filed with regulatory authorities is recognised as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired after 31.3.2008 and onwards in eight subsequent years from the year in which these are acquired.

3 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition,construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred

4 Inventories

Inventories are valued as under : Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis.

Work in Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

5 Recognition of Income and Expenditure

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax but inclusive of excise duty. Expenses are accounted for on accrual basis.

6 Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been stated on prorata basis over the terms of the contract. Foreign currency denominated current assests & current liablities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilties are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7 Commodity Exchange Transactions

Commodity Exchange Transaction are recorded at the commodity exchange rate prevaling on the transaction date. Contracts remaining outstanding at the year end have been recorded as per year end rate and resultant profit and loss arising from outstanding contracts are recognised accordingly in the profit and loss account.

8 Retirement Benefits

The retirement benefits of the employees include Gratuity ,Provident Fund & Leave Encashment . The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contirbution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with company's rules.

9 Employees Stock Option Scheme

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight-line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 " on Share Based Payments" issued by the ICAI.

10 Current & Deferred Tax

The provision for current tax is made at the actual rate applicable for the income of the year as given under the Income Tax Act, 1961. However deferred tax is made at the rate applicable to the subsequent financial year.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet. The same will be charged to profit & loss account in coming years as per the provisions of Section 115JB of Income Tax Act, 1961.

11 Contingent Liabilities

The company has made the provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Contingent Liabilities, barring frivolous claims, are disclosed and those liablities which are possible of maturing are provided for.

12 Government Subsidy

The policy of company is to account for the Government Subsidy on actual receipt basis.

13 Export Incentives

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw materials are not accounted for but given by way of note.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset & treated as expenditure in the year of import/utilisation of license.

14 Investments

Long Term Investements are being valued at cost Current Investments are carried at lower of cost & fair value,determined on an individual investment basis.

15 Impairement of Assets

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the asset's net sales price or present value.

16 Other Accounting Policies

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.


Mar 31, 2010

1 System of Accounting

The financial statements of the company have been prepared to comply with all material aspects of the applicable Accounting Principles in India, the Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on the basis of concern.

2 Fixed Assets & Depreciation a Cost of Fixed Assets

All Fixed Assets are valued at cost/revalued cost net of cenvat credit wherever eligible. Cost includes all expenses and borrowing cost attributable to the project till the date of commissioning.

b Depreciation /Amortisation

Depreciation is provided on straight line method at the rates specified in schedule XIV of the Companies Act 1956 on pro rata basis and the assets having the value upto Rs. 5000 have been depreciated at the rate of 100%. Lease hold Land is amortised over the period of lease. The policy of company is to provide depreciation on the Buildings, Plant & Machinery and Other Fixed assests from the date of commercial production/ put to use.

c Intangible Assets (Other Assets)

Cost of product development for which the company becomes entitled to a Patent/DMF filed with regulatory authorities is recognised as other assets. The policy of company is to amortise such assets acquired upto 31-03-2008 on straight-line basis in five subsequent years and those acquired during the year 2008-09 and onward in eight subsequent years from the year in which these are acquired.

3 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition,construction of qualifying assets have been capitalised as part of cost of assets. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

4 Inventories

Inventories are valued as under :

Stores & Spares are valued at cost.

Raw Materials are valued at cost on FIFO basis.

Work in Process is valued at estimated cost basis or net realisable value whichever is less.

Finished Goods are valued at cost or net realisable value whichever is less and is inclusive of excise duty and all expenditure directly attributable to production.

Finished Goods under test are valued at cost or net realisable value whichever is less and all expenditure directly attributable to production but exclusive of excise duty.

5 Recognition of Income and Expenditure

Sales are recognised when goods are supplied and are recorded net of rebates and sales tax and inclusive of excise duty. Expenses are accounted for on accrual basis and provision is made for all known losses and expenses.

6 Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. The gain or loss arising from forward transactions have been stated on prorata basis over the terms of the contract. Foreign currency denominated current assests & current liablities are translated at year end exchange rates. The resulting gain or loss is recognised in the Profit& Loss Account.

In translating the financial statement of representative foreign offices for incorporation in main financial statements, the monetary assets and liabilties are translated at the closing rates non monetary assets and liabilities are translated at exchange rates prevailing at the dates of the transactions and income and expenses items are converted at the yearly average rate.

7 Retirement Benefits

The retirement benefits of the employees include Gratuity ,Provident Fund & Leave Encashment . The gratuity is funded through the Group Gratuity Policy with Life Insurance Corporation of India and the contribution to the fund is based on actuarial valuation carried out yearly as at 31st March. Contirbution to the provident fund is provided on accrual basis. The leave encashment is provided on the basis of employees entitlement in accordance with companys rules.

8 Employees Stock Option Scheme

The accounting value of stock options representing the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees Stock Option Scheme" of the Company, is amortised as "Deferred Employees Compensation" on a straight-line basis over the vesting period in accordance with the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and Guidance Note 18 " on Share Based Payments" issued by the ICAI.

9 Current & Deferred Tax

The provision for current tax is made at the actual rate applicable for the income of the year as given under the Income Tax Act, 1961. However provision for deferred tax is made at the rate applicable to the subsequent financial year.

MAT Credit Entitlement is shown under the Current Assets in the Balance Sheet. The same will be charged to profit & loss account in coming years as per the provisions of Section 115JB of Income Ta x Act, 1961.

10 Contingent Liabilities

The company has made the provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Contingent Liabilities, barring frivolous claims, are disclosed and those liablities which are possible of maturing are provided for.

11 Government Subsidy

The policy of company is to account for the Government Subsidy on actual receipt basis.

12 Export Incentives

a) Obligation / entitlements on account of Advance Licences Scheme for import of raw material are not accounted for but given by way of note.

b) Export incentives are treated as income on export under DEPB & other post export incentive schemes and the same is offset & treated as expenditure in the year of import/utilisation of license.

13 Investments

Long Term Investements are being valued at cost Current Investments are carried at lower of cost & fair value,determined on an individual investment basis.

14 Impairement of Assets

Management periodically assesses using external and internal sources where there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continous use of the assets and its eventual disposal. The impairment loss to be accounted for is determined as the excess of the carrying amount over the higher of the assets net sales price or present value as determined above.

15 Other Accounting Policies

Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.

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