Accounting Policies of Kabra Drugs Ltd. Company

Mar 31, 2015

Basis of Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1 Accounting Policies

a Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

b Fixed Assets - All fixed assets are stated at cost of acquisition including installation and incidental cost. No addtion/deletion took c Intangible Assets- The company has not having any Intangible Assets during the year.

Depreciation - Depreciation is provided from date of use on straight line method as per the provisions of schedule 14 of the companies Act 1956 and Deprecation charges as per Compnay act 2013.

e Lease - the Company has paid lease rent to DIC for land and account for as per payment basis.

f Impairment of Assets- The company has not having impairment of assets.

g Government Grant & Subsidies -: The Company has not registered for Govt. Granth and Subsidies , during the year .

h Investments - The company has not having investments during the year

i Inventories :- Inventories are valued as certified by management on following basis. Raw Material. At cost Finish Goods

- At Revenue Recognition- Sales are recognized on dispatch of goods to the customers , which normally results in transfer fo title in the goods. The company has only one business segment " MANUFACTURING OF DRUGS " Further , since virtually all sales are effected in the domestic market , there is only one geographical segment .

Therefore , the disclosure requirements of " SEGMENT REPORTING " are not applicable to the company. Related party disclosures as required as per accounting standard ( AS_18 on "

Related party disclosures " issued by the Institute of Chartered Accountant of India , are as below.

k Foreign Currency Transaction -: The company has not incurred any transaction in foreign currency during the year .

Retirement and Employee Benefits

- Contribution of Provident fund and ESIC are charged to P & L a/c on actual basis and provision l for gratuity , leave encasement etc. Retirement benefits are charges to P & L a/c on payment basis. The company has not practice to create separate reserve on actual basis. mIncome Taxes.

- Payment and provisions of Income Tax has been done as per .

Provision & Contingent Liabilities - These are separately disclosed in the financial statement by way of notes to the accounts. n Contingent liabilities are not recognized but are disclosed in the notes, contingent assets are neighed recognized nor disclosed in the financial statement.

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Mar 31, 2014

A Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

b Fixed Assets - All fixed assets are stated at cost of acquisition including installation and incidental cost. No addtion/deletion

c Intangible Assets- The company has not having any Intangible Assest during the year.

depreiation - Depreciation is provided from date of use on staight line method as per the provisions of schedule 14 of the d companes Act 1956.

e Lease - the Company has paid lease rent to DIC for land and account for as per payment basis. f Impairment of Assets- The compnay has not having impairment of assest.

g Government Grant & Subsidies -: The Company has not registered for Govt.Granth and Subitiees , during the year . h Investments - The compnay has not having intestments during the year .

i Inventories -: Inventories are valued as certified by management on following basis. Raw Material. At cost Finish Goods - Revenue Recognition- Sales are recognised on dispatch of goods to the customers, which normally results in transfer fo title in the goods. The company has only one business segment " MANUFACTURING OF DRUGS " Furtner , since virtually all sales are effected in the domestic market , there is only one geographical segment . Therefore , the disclosure reqqirements of " j SEGMENT REPORTING " are not applicable to the company. Related party disclosures as required as per accounting standard ( AS_18 on " Related party discloures " issued by the Institute of Chartered Accoutnat of India , are as below.

k Foreign Currency Transaction -: The company has not incurred any transaction in foreign currency during the year .

Retirement and Employee Benefits - Contribution of Provident fund and ESIC are charged to P & L a/c on actual basis and l provision for gratuity , leave encasement etc. Retirement benefits are charges to P & L a/c on payment basis. The company has not practice to create separate reserve on actual basis.

m Income Taxes.- Payment and provisions of Income Tax has been done as per .

Provision & Contingent Liabilities - These are separately disclosed in the financial statement by way of notes to the accounts. n Contingent liabilties are not recognazed but are disclosed in the notes, contingent assets are neither recognized nor disclosed in the financial statement.

O. CONTINGENT LIABILITIES AS ON BALANCE SHEET DATE. 1] HON, BLE M.P. has given probable liability under sales tax and excise acts on purchase of denatured spirit relating to 1991-1992 . High Court has granted a stay. (Rs. 47.50 Lacs) Estimated amount due.

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Mar 31, 2010

Financial statement have been prepared under historical cost convention on accrual basis of accounting in accordance with the generally accepted accounting principles in India and the provision of the Companies Act, 1956 as adopted consistently by the company.

(1) SYSTEM OF ACCOUNTING

The company adopts mercantile system of accounting and the financial statements are prepared under historical cost convention and on accrual basis. Retirement benefit, post assessments demands, claims, subsidy, and uncertain routine exp. And income to the extent these are not material, are accounted for on cash basis.

(2) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized

(3) FIXED ASSETS AND DEPRECIATION

All fixed assets are stated at cost of acquisition including installation and incidental costs. Depreciation is provided from date of use on straight line method as per the provisions of schedule 14 of the companies Act, 1956.

No addition / deletion took place in fixed assets during the year. No amortization has been made in respect of premium paid for the leasehold land since grant of lease is for a long period. Depreciation on Bio-project Assets is not provided in the accounts since the development could not be commercialized.

(4) INVENTORIES

Inventories are valued as certified by management on following basis.

Raw material and packing materials At Cost

Finished goods At estimated realizable value

Work in process, stores and spares etc. At estimated realizable value

Obsolete, defective and unserviceable stocks are provided for, where required.

(5) TRANSACTION IN FOREIGN CURRENCY

The company has not incurred any transaction in foreign currency during the year.

(6) CONTIGENT LIABILITIES

These are separately disclosed in the financial statements by way of notes to the accounts. Contingent liabilities are not recognized but are disclosed in the notes, contingent assets are neither recognized nor disclosed in the financial statements.

(7) CONTINGENT LIABILITIES AS ON BALANCE SHEET DATE

a) HON. M.P has given probable liability under sales tax and excise acts on purchase of denatured spirit, relating to 1991-92. High Court has granted a stay. ( Rs.47.50 lacs) Estimated amount due.

b) Case relating to dismissal of 21 workers in 1997. Labor court has ruled against the company ordering payment of entire salary to employees for Rs. 6153705/- for the intermittent period. The company has preferred an appeal in the high court.

(8) PROVISION FOR TAXATIONS

Deferred tax resulting from timing difference between book and taxable profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable certainty that asset will be realized in future.

(9) BALANCE CONFIRMATION

Balance confirmation from various parties were not obtained and these are as per books and believed as correct as per management.

(10) CURRENT ASSETS

The current assets, loan and advances have a value on realisation in the ordinary course of business, at least equal to the amount at which these are stated in balance sheet and the provision for all known liabilities have been adequately made and not in excess of the amount reasonably necessary.

(11) REVENUE RECOGNITION

Sales are recognised on dispatch of goods to the customers, which normally results in transfer of title in the goods..

(12) The company has only one business segment Manufacturing of Drugs. Further, since virtually all sales are effected in the domestic market, there is only one geographical segment. Therefore, the disclosure requirements of "Segment Reporting" are not applicable to the company.