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Accounting Policies of Jenburkt Pharmaceuticals Ltd. Company

Mar 31, 2017

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (''Indian GAAP''). The GAAP comprises mandatory Accounting Standards as prescribed under Section 133 of the Companies Act, 2013, (''the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act, (to the extent notified) and guidelines issued by Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied.

2. Fixed Asset:

a. Property, Plant and Equipment:

Property, Plant and Equipment are carried at the cost of acquisition or construction, less accumulated depreciation/accumulated impairment, if any. Subsequent cost are included in the asset''s carrying amount or recognized as separate assets, as appropriate, only when it is possible that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

b. Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.

3. Depreciation:

Depreciation on tangible fixed assets is provided using the Written down value method (except on factory building and go down at Sihor on which depreciation has been provided on straight line basis) at the rate prescribed in schedule II of the Companies Act, 2013 on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considered the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc. Useful life of tangible assets adopted is not different then the useful life prescribed in Part C of Schedule II of the Companies Act, 2013. Intangible Assets including trademarks are amortized over the estimated useful economic life.

4. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognized wherever the carrying amount of asset exceeds its recoverable amount.

5. Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange rate differences arising on the settlement of foreign currencies monetary items or on reporting Company''s foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous year financial statements are recognized as income or expense in the year in which they arise.

6. Investments:

All the investments are long term investments, which are intended to be held for more than one year from the date on which such investments are made, are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

7. Inventories:

Inventories are valued at the lower of cost and net realizable value cost is computed based on following first in first out method. Cost of finished goods and work in progress include all cost of purchases, conversion cost and other cost incurred in bringing the inventories to their present location and condition. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.

8. Revenue Recognition:

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

Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sale of goods are recorded net of trade discounts, rebates, Sales tax, Value Added Tax and gross of Excise Duty.

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and applicable interest rate. Dividend Income on investments is accounted for when the right to receive the payment is established.

9. Employee Benefit:

i) Short Term employee benefits are recognized as expense at the undiscounted amount in the Profit & Loss Account of the Year in which the related services is rendered.

ii) Post Employment and long term benefits are recognized as expenditure in the Profit & Loss Account for the Year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation technique. Refer the detailed remark in Schedule no. 22.

iii) Certain employees are also participants in the superannuation plan which is a defined contribution plan. The Company has no obligation towards the superannuation plan beyond its monthly contribution.

10. Provision for Current and Deferred Tax:

Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain, that sufficient future taxable income will be available.

Provision for Current taxes is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961. Deferred Tax resulting from “Timing Difference” between taxable and accounting income is accounted for using the tax rates in force that are substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward only to the extent that there is a virtual certainty assets will be realized in future.

11. Research and development:

Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred.

Research and Development expenditure incurred on capital assets are depreciated over its useful life as determined by the management by complying with the requirement of Schedule II of Companies Act, 2013.

12. Provisions and Contingent Liabilities:

i) A provision is recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Liabilities are not recognized but are disclosed in notes.

ii) National Pharmaceutical Pricing Authority (NPPA) had served a Show Cause Notice to the company alleging that a company''s product was violating NPPA''s standing order. However after a Personal hearing and detailed submissions filed by the Company before them, NPPA passed a written order, that the Company''s product did not violate the said standing order. Subsequently, NPPA reviewed its own order and issued Show Cause and Demand Notice to the Company. The Company subsequently filed a writ petition against the Show Cause and Demand notice of NPPA, before the Hon''ble High Court of Bombay, and the same was quashed by the Hon''ble High Court of Bombay. The matter was settled in favour of the company. The NPPA after over a year filed a Special Leave Petition (SLP) (citing demand notice for Rs. 16.45 Cr) at Hon''ble Supreme Court, where the matter is pending for hearing. The company has been legally advised, that based on the facts and merits of the case, the demand raised by NPPA is not likely to crystallize and therefore the same is not recognized.

iii) Based on recommendation of Ministry of Health and Family Welfare, the Central Government on 10th March 2016 issued notifications prohibiting the manufacturing and sale of certain fixed combination drugs. The said notifications, inter-alia, affects the manufacturing and sales of 7 products manufactured by the Company. However, Company had filed a writ petition in Hon''ble High Court of Delhi challenging the said notifications. The Hon''ble High Court, Delhi passed an order quashing all the notifications of the Ministry. However, the Ministry have filed special leave petition challenging the said order at Supreme Court and the matter is pending for hearing before Supreme Court. According to the managements’ view, the sale and profitability of the Company will not be substantially affected.

15. Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash on hand and cash at bank including fixed deposit with original maturity period of three months or less and short term highly liquid investments with an original maturity of three months or less.

16. Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), through its notification in Official Gazette dated February 16th, 2015 notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Company. Ind AS would replace the existing Indian GAAP prescribed under section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2015. Based on subsequent notification issued by MCA, Ind AS would be applicable to the company from the period beginning from April 1st, 2017.


Mar 31, 2016

33 SIGNIFICANT ACCOUNTING POLICIES

of Jenburkt Pharmaceuticals Limited as at 31st March, 2016

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP’). The GAAP comprises mandatory Accounting Standards as prescribed under Section 133 of the Companies Act, 2013, (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act, (to the extent notified) and guidelines issued by Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied.

2. Fixed Asset:

a. Tangible Assets:

Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment, if any. The cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

b. Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.

3. Depreciation:

Depreciation on tangible fixed assets is provided using the Written down value method (except on factory building and go down at Sihor on which depreciation has been provided on straight line basis) at the rate prescribed in schedule II of the Companies Act, 2013 on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considered the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc. Useful life of tangible assets adopted is not different then the useful life prescribed in Part C of Schedule II of the Companies Act, 2013. Intangible Assets including trademarks are amortized over the estimated useful economic life.

4. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognized wherever the carrying amount of asset exceeds its recoverable amount.

5. Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange rate differences arising on the settlement of foreign currencies monetary items or on reporting Company’s foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous year financial statements are recognized as income or expense in the year in which they arise.

6. Investments:

All the investments are long term investments, which are intended to be held for more than one year from the date on which such investments are made, are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

7. Inventories:

Items of inventories are valued (as per guidelines laid down by the Institute of Chartered Accountants of India in Accounting Standard-2 (Revised) titled “Valuation of Inventories” as follows :

i Raw and Packing Materials At cost on the basis of First in First out Method.-to be deleted

ii Work in progress At cost or net realizable value whichever is lower including appropriate overheads incurred thereon.

iii Finished Goods At cost or net realizable value whichever is lower inclusive of

cost of materials, labour and other related overheads.

8. Revenue Recognition:

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

Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sale of goods are recorded net of trade discounts, rebates, Sales tax, Value Added Tax and gross of Excise Duty.

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

Dividend Income on investments is accounted for when the right to receive the payment is established.

9. Employee Benefit:

i) Short Term employee benefits are recognized as expense at the undiscounted amount in the

Profit & Loss Account of the Year in which the related services is rendered.

ii) Post Employment and long term benefits are recognized as expenditure in the Profit & Loss

Account for the Year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation technique.

iii) Certain employees are also participants in the superannuation plan which is a defined contribution plan. The Company has no obligation to the superannuation plan beyond its monthly contribution.

10. Provision for Current and Deferred Tax:

Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain, that sufficient future taxable income will be available.

Provision for Current taxes is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961. Deferred Tax resulting from “Timing Difference” between taxable and accounting income is accounted for using the tax rates in force that are substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward only to the extent that there is a virtual certainty assets will be realized in future.

11. Research and development:

Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred.

Research and Development expenditure incurred on capital assets are depreciated over its useful life as determined by the management by complying with the requirement of Schedule II of Companies Act, 2013.

12. Provisions and Contingent Liabilities:

1. A provision is recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Liabilities are not recognized but are disclosed in notes.

.


Mar 31, 2015

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ('Indian GAAP') and comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013, ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 1956, to the extent applicable.

2. Fixed Asset:

a. Tangible Assets:

Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment, if any. The cost of fixed assets comprises of its purchase price, including import duties and other non- refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

b. Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.

3. Depreciation:

Depreciation on tangible fixed assets is provided using the Written down value method (except on factory building and godown at Sihor on which depreciation has been provided on straight line basis) at the rate prescribed in schedule II of the Companies Act, 2013 on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considered the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc. Useful life of tangible assets adopted is not different then the useful life prescribed in Part C of Schedule II of the Companies Act, 2013. Intangible assets including Trademark are amortising over the estimated useful economic life.

4. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognized wherever the carrying amount of asset exceeds its recoverable amount.

5. Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange rate differences arising on the settlement of foreign currencies monetary items or on reporting Company's foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous year, financial statements are recognized as income or expense in the year in which they arise.

6. Investments:

All the investments are long term investments, which are intended to be held for more than one year from the date on which such investments are made, are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

7. Inventories:

Items of inventories are valued as per guidelines laid down by the Institute of Chartered Accountants of India in Accounting Standard-2 (Revised) titled "Valuation of Inventories" as follows :

i Raw and Packing Materials At cost on the basis of First in First out Method.

ii Work in progress At cost or net realizable value whichever is lower including appropriate overheads incurred thereon.

iii Finished Goods At cost or net realizable value whichever is lower inclusive of cost of materials, labour and other related overheads.

8. Revenue Recognition:

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

Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sale of goods are recorded net of trade discounts, rebates, Sales tax, Value Added Tax and gross of Excise Duty.

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

Dividend Income on investments is accounted for when the right to receive the payment is established.

9. Employee Benefit:

I) Short Term employee benefits are recognized as expense at the undiscounted amount in the Profit & Loss Account of the Year in which the related services is rendered.

ii) Post Employment and long term benefits are recognized as expenditure in the Profit & Loss Account for the Year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation technique.

10. Provision for Current and Deferred Tax:

Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain, that sufficient future taxable income will be available.

Provision for Current taxes is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961. Deferred Tax resulting from "Timing Difference" between taxable and accounting income is accounted for using the tax rates in force that are substantively enacted as on the balance sheet date. Deferred tax assets is recognised and carried forward only to the extent that there is a virtual certainty assets will be realized in future.

Direct taxes grouped under the head "other current assets" are net of provisions.

11. Research and development:

Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred.

Research and Development expenditure incurred on capital assets are depreciated over its useful life as determined by the

management by complying with the requirement of Schedule II of Companies Act, 2013.

12. Provisions and Contingent Liabilities:

1. A provision is recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Liabilities are not recognized but are disclosed in notes.

2. National Pharmaceutical Pricing Authority (NPPA) had served a Show Cause Notice to the company alleging that a company's product was violating NPPA's standing order. However after a Personal hearing and detailed submissions filed by the Company before them, NPPA passed a written order, that the Company's product did not violate the said standing order. Subsequently, NPPA reviewed its own order and issued Show Cause and Demand Notice to the company. The company subsequently filed a writ petition against the Show Cause and Demand notice of NPPA, before the Hon'ble High Court of Bombay, and the same was quashed by the Hon'ble High Court of Bombay. Therefore the matter was settled in favour of the company. The NPPA after over a year filed a Special Leave Petition (SLP) (citing demand notice for Rs. 16.45 Cr) at Hon'ble Supreme Court, where the matter is pending. The company has been legally advised, that based on the facts and merits of the case, the demand raised by NPPA is not likely to crystallise and therefore the same is not recognised.

13. Old provisions no longer required have been written off/back in surplus in statement of Profit & Loss Account.

14. Corporate Social responsibility:

a) Gross amount required to be spent by the Company during the year 2014-15 is Rs. 18,65,477/-.

b) Amount spent during the year.

Amount (in Rs) Yet to Sr. Particulars spent in cash * be paid Total No. in cash (in Rs)

i Amount contributed 1,18,800/- Nil 1,18,800/- to Giants Groups of Sihor

ii Amount contributed 20,00,000/- Nil 20,00,000/- to OM Ram Mantra Mandir Trust

*Represents actual outflow during the year.

15. Related Party Disclosure:

As per AS-18, the disclosure in respect of transactions with Related Parties is given below:

Sr. Nature of Namiutere of No. Expenditure Person/Entity

1 Remuneration Directors

2 Dividend Directors, Relatives and Associate Enterprise

3 Rent Associate Enterprise

4 Security Deposit Associate Enterprise

Sr. Nature of Amount Paid No. Expenditure 31st March, 2015 31st March, 2014

1 Remuneration 1,05,82,037.00 1,05,73,589.00

2 Dividend 1,11,33,692.70 90,83,936.40

3 Rent 37,80,000.00 37,80,000.00

4 Security Deposit 30,00,000.00 30,00,000.00


Mar 31, 2014

1. Basis of Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on the “Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India the applicable Accounting Standards notified u/s 211(3C) of the Company''s Act, 1956 and specified in Companies (accounting Standard) Rules, read with the General Circular No. 15/203 Dated September, 12, 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 pronouncement of the Institute of Chartered Accountants of India, and the provisions of the Companies Act, 1956 and the applicable sections of Companies Act, 2013.

2. Fixed Asset:

Fixed assets are stated at historical cost of acquisition / construction less accumulated depreciation and impairment loss, if any. Cost includes all expenses related to acquisition and installation of the concerned assets and excludes any duties/taxes recoverable and capital subsidy/grant received. Subsequent expenditure incurred on existing fixed asset is expensed out except where such expenditure increases the future economic benefits from the existing assets.

3. Depreciation:

Depreciation on fixed asset have been provided on the written down value method except with reference to factory building and godown at Sihor on which depreciation has been provided on straight line basis. The depreciation on fixed assets have been provided on pro-rata basis commencing from the date of purchase /acquisition/ installation/ from the date it is put to use.

4. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognized wherever the carrying amount of asset exceeds its recoverable amount.

5. Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange rate differences arising on the settlement of foreign currencies monetary items or on reporting Company''s foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous year financial statements are recognised as income or expense in the year in which they arise.

6. Investments:

Long term investments are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

7. Revenue Reorganization

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of goods, excise duty, value added tax and export earnings. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking to account the amount outstanding and the rate is applicable.

8. Excise Duty

Excise is accounted on the basis of payment made in respect of goods cleared. No provision is made in respect of goods lying in a bonded warehouse. However the same does not have any impact on the profit earned by the company

9. Employee Benefit

I) Short Term employee benefits are recognized as expense at the undiscounted amount in the Profit & Loss Account of the Year

in which the related services is rendered ii) Post Employment and long term benefits are recognized as expenditure in the Profit & Loss Account for the Year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation technique.

10. Provision for Current and Deferred Tax

Provision for Current taxes is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961. Deferred Tax resulting from “Timing Difference" between taxable and accounting income is accounted for using the tax rates in force that are substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward only to the extent that there is a virtual certainty assets will be realized in future.

11. Provisions and Contingent Liabilities:

A provision is recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Liabilities are not recognized but are disclosed in notes.

12. Previous year''s figures have been regrouped and rearranged wherever necessary.


Mar 31, 2012

1. Basis of Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and they comply with the Accounting Standards prescribed in the Companies (accounting Standards) rule, 2006 issued by the Central Government to the extent applicable and with the applicable provisions of the Companies Act, 1956.

2. Fixed Asset:

Fixed assets are stated at historical cost of acquisition / construction less accumulated depreciation and impairment loss, if any. Cost (Net of Input tax credit received / receivable) compromises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

3. Depreciation:

Depreciation on fixed asset have been provided on the written down value method at the rate prescribed in the Schedule XIV of the Companies Act, 1956 except with reference to factory building and godown at Sihor on which depreciation has been provided on straight line basis. The depreciation on fixed assets have been provided on pro-rata basis commencing from the date of purchase /acquisition/ installation/ from the date it is put to use.

4. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognized wherever the carrying amount of asset exceeds its recoverable amount.

5. Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange rate differences arising on the settlement of foreign currencies monetary items or on reporting Company's foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous year financial statements are recognized as income or expense in the year in which they arise.

6. Investments:

Long term investments are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

7. Inventories:

Items of inventories are valued (as per guidelines laid down by the Institute of Chartered Accountants of India in Accounting Standard-2 (Revised) titled Valuation of Inventories" as follows :

I Raw & Packing Materials At cost on the basis of First in First out Method.

II Work in progress At cost or net realizable value whichever is lower including appropriate overheads incurred thereon.

III Finished Goods At cost or net realizable value whichever is lower inclusive of cost of materials, labour and other related overheads

8. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, excise duty, value added tax and export earnings. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate is applicable.

9. Excise Duty

Excise Duty is accounted on the basis of payment made in respect of goods cleared. No provision is made in respect of goods lying in a bonded warehouse. However the same does not have any impact on the profits earned by the company.

10. Employee Benefit

i). Short Term employee benefits are recognized as expense at the undiscounted amount in the Profit & Loss Account of the Year in which the related services is rendered.

ii) Post Employment and long term benefits are recognized as expenditure in the Profit & Loss Account for the Year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation technique.

11. Provision for Current and Deferred Tax

Provision for Current taxes is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961. Deferred Tax resulting from "Timing Difference" between taxable and accounting income is accounted for using the tax rates in-laws that are substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward only to extend that there is a virtual certainty that the assets will be realized in future.

12. Provisions and Contingent Liabilities:

A provision is recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Liabilities are not recognized but are disclosed in notes.

13. Previous year's figures have been regrouped and rearranged wherever necessary.


Mar 31, 2011

A) Basis of Accounting:

The financial statements are prepared under the historical cost convention on the “Accrual Concept” of accountancy in accordance with the accounting principles generally accepted in India and they comply with the Accounting Standards prescribed in the Companies (accounting Standards) rule, 2006 issued by the Central Government to the extent applicable and with the applicable provisions of the Companies Act, 1956.

b) Fixed Asset:

Fixed assets are stated at historical cost of acquisition / construction less accumulated deprecation and impairment loss, if any. Cost (Net of Input tax credit received / receivable) compromises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

c) Depreciation:

Depreciation on fixed asset have been provided on the written down value method at the rate prescribed in the Schedule XIV of the Companies Act, 1956 except with reference to factory building and godown at Sihor on which depreciation has been provided on straight line basis. The depreciation on fixed assets have been provided on pro-rata basis commencing from the date of purchase /acquisition/ installation/ from the date it is put to use.

d) Inventories:

Items of inventories are valued (as per guidelines laid down by the Institute of Chartered Accountants of India in Accounting Standard-2 (Revised) titled “Valuation of Inventories” as follows :

i Raw and Packing Materials At cost on the basis of First in First out Method.

ii Work in progress At cost or net realisable value whichever is lower including appropriate overheads incurred thereon.

iii Finished Goods At cost or net realisable value whichever is lower inclusive of cost of materials, labour and other related overheads.

e) Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are restated at year end exchange rates. Exchange differences arising on the settlement of foreign currencies monetary items or on reporting Company’s foreign currency monetary items at rate different from those at which they were initially recorded during the year or reported in the previous year financial statements are recognised as income or expense in the year in which they arise.

f) Investments:

Long term investments are stated at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

g) Research and development:

Revenue expenditure on Research & Development is recognized as expense in the year in which it is incurred.

h) Revenue Recognition:

Revenue in respect of insurance/other claims, commission etc. are recognised only when it is reasonably certain that the ultimate collection will be made.

i) Impairment of Assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors; such impairment loss is recognised wherever the carrying amount of asset exceeds its recoverable amount.

j) Provisions and Contingent Liabilities:

A provision is recognised when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

k) Employees’ Retirement Benefits:

The company has classified various retirement benefits as under:-

b) Defined Benefit Plans:

1) Gratuity for employees managed by Life Insurance Corporation of India, Mumbai.

2) Leave Encashment Benefit for Employees’ at Mumbai.

The company has made an arrangement with LIC of India for gratuity and leave encashment payable to employees at the time of their retirement or otherwise. In terms of AS-15 of ICAI, Actuarial valuation was carried out by an actuary in respect of gratuity and leave encashment liability as existed on 31.03.2009, including past liability. Based on the said report, provision in respect of gratuity and leave encashment was made in accounts for the year ended 31.03.2009, for liability pertaining to the F.Y. 2008-09. Since the liabilities in respect of past services was determined at Rs.37,09,599/- and Rs. 29,69,763/- for gratuity and leave encashment respectively, the company had decided to recognize the same over a period of 3 years beginning from F.Y. 2008-09 in 3 equal installments of Rs.12,36,533/- and Rs.9,89,921/- each, and accordingly necessary provisions were made in the accounts.

In the F.Y. 2009-10, the company had contributed a sum of Rs.36,18,366/- and Rs.31,73,372/- towards gratuity and leave encashment liability to LIC of India. The said contribution was far in excess of Current Service Cost (relating to liability of F. Y. 2009-10) and covered the past liability also.

In the light of the above facts no provision is required to be made in the accounts of the current F.Y. 2010-11 for the past liability (in terms of note no. 1(m)(B) of Notes to Accounts for the F.Y. 2008-09)

Contribution for Group Gratuity Scheme of LIC (F.Y. 2010-11)

In the current FY 2010-11, company has made a contribution of Rs.19,96,238/- which is in excess of Current Service Cost (relating to liability of FY 2010-11) of Rs.7,05,597/- and recognized past liability (relating to FY 2008-09) of Rs.7,80,326/- and provision appearing in the accounts is no longer required.

The contribution made by the company towards Group Gratuity Scheme of LIC is charged to the Revenue Account.

Leave Encashment for employees at Plant:

Provision for Leave Encashment payable to employees (at plant) at the time of their retirement or otherwise is estimated based on present salary drawn by the employees as on the date of Balance Sheet and accordingly provisions are made in the accounts. Provision for the current year is Rs 3,44,828/- (Rs 1,52,000/- for the F.Y. 31st March, 2010).

l) Taxes on Income:

Tax expenses comprise of current and differed taxes. Current income tax is measured at the amount expected to be paid in accordance with the Indian Income Tax Act.

Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income to the year and reversal of timing differences of earlier years. Differed tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.


Mar 31, 2010

A) System of Accounting:

The Company follows accrual System of Accounting for all the items of revenue and cost.

b) Inflation:

Assets and Liabilities are shown at historical cost. No adjustments are made for changes in purchasing power of money.

c) Fixed Assets:

Fixed assets are recorded at cost net of cenvat.

d) Depreciation:

Depreciation on fixed asset have been provided on the written down value method at the rate prescribed in the Schedule XIV of the Companies Act, 1956 except with reference to factory building and godown at Sihor on which depreciation has been provided on straight line basis. The depreciation on fixed assets have been provided on pro-rata basis commencing from the date of purchase /acquisition/ installation/ from the date it is put to use.

e) Inventories:

Items of inventories are valued (as per guidelines laid down by the Institute of Chartered Accountants of India in Accounting Standard - 2 (Revised) titled "Valuation of Inventories" as follows:

i Raw and Packing Materials At cost on the basis of first in first out method.

ii Work in progress At cost or net realisable value whichever is lower including appropriate overheads incurred thereon._

iii Finished Goods

At cost or net realisable value whichever is lower inclusive of cost of materials, labour and other related overheads. Stock of finished goods includes stock of samples valued at cost.

f) Sales:

Sales is inclusive of excise duty, net of VAT.

g) Foreign Currency Transaction:

Foreign currency transactions remaining unsettled at the end of year are translated at year end rates and foreign currency transactions pertaining to raw material, settled during the year are accounted on the basis of actual payment made.

h) Investments:

Investments that are intended to be held for a reasonably long period are classified as long term investments and valued at cost. Diminutions in value of an investment which are temporary in nature are not recognized.

i) Research and Development:

Revenue Expenditure pertaining to Research and Development is charged to Profit and Loss Account.

j) Revenue Recognition:

Revenue in respect of insurance/other claims, commission etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

k) Impairement of Assets:

The carrying amount of assets are reviewed at each Balance Sheet date for identifying an impairment based on internal / external factors. Loss on impairment is provided to the extent the carrying amount of assets exceeds its recoverable amount.

l) Provisions:

The Company recognises provision only when there is a present obligation as a result of past events and covers a reliable estimate of amount of obligation can be made.

B. Defined Benefit Plans:

1. Gratuity for employees of Mumbai and Plant s

2. Leave Encashment Benefit for Employees at Mumbai

The company has made an arrangement with LIC of India for gratuity and leave encashment payable to employees at the time of their retirement or otherwise. In terms of AS-15 of ICAI Actuarial valuation was carried out by an actuary in respect of gratuity and leave encashment liability as existed on 31.03.2009, including past liability. Based on the said report, provision in respect of gratuity and leave encashment was made in accounts for the year ended 31.03.2009, for liability pertaining to the F.Y.2008-09.Since the liabilities in respect of past services wasdetermined at Rs. 37,09,599/- and Rs.29,69,763/- for gratuity and leave encashment respectively, the company had decided to recognize the same over a period of 3 years beginning Financial Year 2008-09 in 3 equal installment of Rs. 12,36,533/-and Rs.9,89,921/-each, and accordingly necessary provisions were made in the accounts.

However, in current financial year company has contributed a sum of Rs.36,18,366/- and Rs.31,73,372/- towards Gratuity and leave encashment liability to LIC of India. The said contribution is in excess of Current Service Cost (relating to liability of F. Y.2009-10), which covers past liability of the company also. The contribution to LIC is charged to Revenue Account.

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