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Accounting Policies of Kilitch Drugs(I) Ltd. Company

Mar 31, 2015

A) Basis of Preparation of Financial Statements

The Financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ("GAAP") including the Accounting Standards ("AS") notifed under the relevant provisions of the Companies Act,2013.

b) Infation

The fnancial statements are based on historical costs. These costs are not adjusted to refect the impact of the changing value of the purchasing power of money.

c) Use of Estimates

The preparation of Financial Statements in conformity with GAAP requires Management to make estimate and assumption that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of fnancial statements and reported amount of revenue and expenses for the year. Actual result could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized. Any revision to an accounting estimate is recognized prospectively in the year of revision.

d) Inventories

Raw Material, Packing Material, Stores and spare parts, Work-in-progress and Finished Goods are valued at cost or net realizable value whichever is lower. Cost of Raw Materials, Packing Materials and Stores & spare parts are determined on last purchase price. Work-in-progress and Finished Goods inventories include production overheads, to the extent applicable.

e) Revenue Recognition

i. Sales are recognized net of returns, trade discounts, rebates and include excise duty on manufactured products.

ii. Revenue in respect of export sales is recognized on shipment of products.

iii. Service Income (Processing Charges) is recognized pro-rata over the period of the contract as and when services are rendered.

iv. Export incentive benefts consist of duty drawback, high value added licenses and DEPB entitlements. These are recognized on the basis of receipt of proof of export.

v. Interest is recognised on time proportion basis.

vi. Dividend Income is recognised when the right to receive the same is established.

f) Fixed Assets

Fixed Assets are stated at cost net of cenvat credit less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable costs of bringing the assets to their working condition for intended use.

g) Depreciation

Depreciation on the Fixed Assets is provided to the extent of depreciable amount on the Written Down Value Method [both Tangible & Intangible]. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

h) Impairment of Assets

In accordance with AS-28 on "Impairment of Assets" notifed under the relevant provisions of the Companies Act, 2013, where there is any indication of impairment of the company's assets related to cash generating units, the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is estimated as the higher of its net selling price and its value in use. An impairment loss is recognized whenever the carrying amount of such assets exceeds its recoverable amount. Impairment loss, if any, is recognized in the Statement of Proft and Loss.

i) Investments

Investments that are intended to be held for more than a year, from the date of acquisition, are classifed as long term investments and are carried at cost. Provision for diminution in their values is made only if the diminution is other than temporary in nature. Current investments are carried at the lower of cost and quoted/fair value, computed category wise.

j) Foreign Currency Transactions

i. Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at Balance sheet date are restated at the year-end rates. Non Monetary foreign currency items are carried at cost.

ii. Exchange differences arising as a result of the subsequent settlements or on transactions are recognized as income or expenses in the Statement of Proft & Loss except the exchange differences arising on long term foreign currency monetary items relating to the acquisition of the fxed assets, which are adjusted to the carrying cost of the assets.

k) Employee Benefts

i. Short term employee benefts are recognized as expenses at the undiscounted amounts in the Statement of proft & loss of the year in which the related service is rendered.

ii. Post employment & other Long Term Employee Benefts are recognized as an expense in the Statement of Proft & Loss for the year in which it is incurred. Post employment and other long term employee benefts are recognised as an expense in the Statement of Proft & Loss for the year in which the employee has rendered services. The expenses are recognised at the present value of the amounts payable determined using actuarial valuation techniques, with effect from April 2014. Actuarial gains and losses in respect of post employment and other long term benefts (net of expected return on plan assets) are charged to the Statement of Proft & Loss.

l) Taxes on Income

i. Provision for income tax (current tax) is determined on the basis of the taxable income of the current year in accordance with the Income Tax Act, 1961.

ii. Deferred tax, if any, is recognized in respect of deferred tax assets (subject to the consideration of prudence) and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

iii. Minimum Alternate Tax ('MAT') credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specifed period.

In the year in which the Company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of proft and loss and shown as "MAT Credit Entitlement".

The Company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will be able to utilise the MAT Credit Entitlement within the period specifed under the Income-tax Act, 1961.

m) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets/stock in trade are capitalized as a part of the cost of such assets or added to stock in trade. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or Sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

n) Employee Stock Option Plan

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on 'Accounting for Employee Share-based payments' issued by Institute of Chartered Accountants of India (ICAI) read with Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value if any, of the stock options as on the date of grant over the exercise price of the options is recognized as deferred employee compensation and is charged to the Statement of Proft and Loss on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

o) Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the fnancial statements.


Mar 31, 2014

A) Basis of Preparation of Financial Statements

The Financial statements have been prepared under the historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ("GAAP") and comply with the mandatory Accounting Standards ("AS") as notified by the companies Accounting Standard (Rules), 2006 to the extent applicable and with the relevant provisions of the Companies Act, 1956.

b) Inflation

The financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value of the purchasing power of money.

c) Use of Estimates

The preparation of Financial Statements in conformity with GAAP requires Management to make estimate and assumption that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for the year. Actual result could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized. Any revision to an accounting estimate is recognized prospectively in the year of revision.

d) Inventories

Raw Material, Packing Material, Stores and spare parts, Work-in-progress and Finished Goods are valued at cost or net realizable value whichever is lower. Cost of Raw Materials, Packing Materials and Stores & spare parts are determined on last purchase price. Work-in-progress and Finished Goods inventories include production overheads, to the extent applicable.

e) Revenue Recognition

i. Sales are recognized net of returns, trade discounts, rebates and include excise duty on manufactured products.

ii. Revenue in respect of export sales is recognized on shipment of products.

iii. Service Income (Processing Charges) is recognized pro-rata over the period of the contract as and when services are rendered.

iv. Export incentive benefits consist of duty drawback, high value added licenses and DEPB entitlements. These are recognized on the basis of receipt of proof of export.

v. Interest is recognised on time proportion basis.

vi. Dividend Income is recognised when the right to receive the same is established.

f) Fixed Assets

Fixed Assets are stated at cost net of cenvat credit less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable costs of bringing the assets to their working condition for intended use.

g) Depreciation

Depreciation on the Fixed Assets [both Tangible & Intangible] is provided on the Written Down Value Method at the rates and in the . manner specified in Schedule XIV to the Companies Act, 1956.

h) Impairment of Assets

In accordance with AS-28 on "Impairment of Assets" as notified by Companies (Accounting Standards) Rules, 2006, where there is any indication of impairment of the company''s assets related to cash generating units, the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is estimated as the higher of its net selling price and its value in use. An impairment loss is recognized whenever the carrying amount of such assets exceeds its recoverable amount. Impairment loss, if any, is recognized in the Statement of Profit and Loss.

i) Investments

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investments and are carried at cost. Provision for diminution in their values is made only if the diminution is other than temporary in nature. Current investments are carried at the lower of cost and quoted/fair value, computed category wise.

j) Foreign Currency Transactions

i. Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at Balance sheet date are restated at the year-end rates. Non Monetary foreign currency items are carried at cost.

ii. Exchange differences arising as a result of the subsequent settlements or on transactions are recognized as income or expenses in the statement of Profit & Loss except the exchange differences arising on long term foreign currency monetary items relating to the acquisition of the fixed assets, which are adjusted to the carrying cost of the assets.

k) Employee Benefits .

i. Short term employee benefits are recognized as expenses at the undiscounted amounts in the Statement of profit & loss of the year in which the related service is rendered.

ii. Post employment & other Long Term Employee Benefits are recognized as an expense in the Statement of Profit & Loss for the year in which it is incurred. The company computes the liability for gratuity as per The payment of Gratuity Act, and charges it to the Statement of Profit and Loss, whenever an eligible employee retires/resigns from services. With effect from the Financial year under report, the company has provided for Gratuity Liability as per the working obtained from the LIC of India & Leave Encashment liability based on its own calculations.

l) Taxes on Income

i. Provision for income tax (current tax) is detennined on the basis of the taxable income of the current year in accordance with the Income Tax Act, 1961.

ii. Deferred tax, if any, is recognized in respect of deferred tax assets (subject to the consideration of prudence) and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

m) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets/stock in trade are capitalized as a part of the cost of such assets or added to stock in trade. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or Sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

n) Employee Stock Option Plan

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on ''Accounting for Employee Share-based payments'' issued by Institute of Chartered Accountants of India (ICAI) read with Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value if any, of the stock options as on the date of grant over the exercise price of the options is recognized as deferred employee compensation and is charged to the Statement of Profit and Loss on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

o) Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

A. Accounting Convention(AS -1)

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in conformity with the accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules,2006 issued by the Central Government to the extent applicable and the relevant provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles(GAAP) in India requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of the financial statements and of the reported amounts of the revenues and expenses for the year. Actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively in current and future periods.

C. Revenue Recognition (AS-9)

a) Sales which include services are recognized net of returns, trade discounts, rebates and include excise duty on manufactured products.

b) Revenue in respect of export sales is recognized on shipment of products.

c) Service Income (Processing Charges) is recognised as per contractual terms.

d) Dividend Income is recognised on receipt basis

e) Interest Income is recognised on time proportionate method.

D. Fixed Assets and Depreciation (AS-6)(AS-10)

a) Fixed Assets are stated at historical cost of acquisition/construction less accumulated depreciation and impairment loss. Cost (net of input tax credit received/receivable) includes related expenditure and pre-operative and project expenses for the period up to completion of the construction/assets are put to use.

b) Depreciation is provided on Written Down Value Method as per Section 205(2)(b), at the rates prescribed for single shift in Schedule XIV of The Companies Act, 1956.

c) Depreciation on addition/disposal of the Fixed Assets during the year is provided on prorata basis according to the period during which the assets are put to use.

E. Impairment of Assets(AS-28)

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

F. Investments (AS-13)

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

G. Inventories (AS -2)

Raw Material, Packing Material, Stores and spare parts are valued at cost or net realizable value whichever is lower. Work-in- progress and Finished Goods inventories include production overheads, to the extent applicable. Cost of Raw Materials, Packing Materials and Stores & Spare part are determined on last purchase price.

H. Borrowing Costs(AS-16)

Borrowing Costs are recognized as an expense in the period in which they are incurred except the borrowing cost attributable to the acquisition/construction of a qualifying asset which are capitalized as part of the cost of such asset, up to the date, the assets are ready for their intended use.

I. Foreign Currency Transactions(AS-ll)

The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. The exchange difference resulting from settled transaction is adjusted in the profit and loss account. Year end balances of monetary items are restated at the year end exchange rates and the resultant net gain or loss is adjusted in the profit and loss account.

J. Taxation(AS-22)

Excise Duty and Value Added Tax(VAT) :- Excise Duty and VAT is accounted net of purchase tax benefit availed on purchase inputs, fixed assets and eligible service.

Taxes on Income

a) Tax expenses comprises current and deferred tax.

b) Current Tax is measured as the amount expected to be paid in accordance with the provisions of The Income Tax Act, 1961.

c) Deferred Tax reflects the impact of current year timing differences between book and tax profits and reversal of timing difference of earlier years. Deferred Tax is measured based on the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date.

d) Deferred Tax Assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

K. Retirement Benefits (AS-15)

Contributions in respect of defined retirement schemes such as Provident Funds are charged to the Profit and loss Account as incurred. The company does not provide for gratuity as required under AS 15 accounting guidelines prescribed by Institute of Chartered Accountants of India (ICA1). However, whenever an eligible employee retires/ resigns services the company computes liability for gratuity as per payment of gratuity Act, and charges it to the profit and loss account.

L. Employee Stock Option Plan

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on ''Accounting for Employee Share-based payments'' issued by Institute of Chartered Accountants of India (ICA1) read with Securities and Exchange Board of India (SEBl) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBL The excess of market value if any, of the stock options as on the date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to the Profit and Loss Account on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

M. Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

N. Earnings Per Share (AS-20)

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earnings per share is computed by dividing the net Profit for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net Profit for the period by the number of Equity shares outstanding during the year as adjusted for the effects of all diluted potential equity shares.

O. Cash Flow Statement (AS-3)

The cash Flow Statement is prepared by the indirect method as set out in Accounting Standard 3 on Cash Flow statements and present cash flows by operating, investing & financing activities of the company.

P. Contingencies and Events occurring after the Balance sheet date (AS-4)

There have been no contingent losses after the Balance sheet date, which need to be disclosed in the financial statement. There have been no events occurring after the balance sheet date that affect the figures stated in the Financial Statements and that represent material changes and commitments affecting the financial position of the Company.


Mar 31, 2012

A. Accounting Convention

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in conformity with Ac accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government to the extent applicable and the relevant provisions of die Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles(GAAP) in India requires the Management to make estimates and assumptions dial affect die reported amounts of assets and liabilities and die disclosures of contingent babdities on die date of die financial statements and of die reported amounts of die revenues and expenses for die year. Actual results could differ from these estimates. Any revision to die accounting estimates is recognized prospectively in current and future periods.

C. Revenue Recognition

a) Sales which include services are recognized net of returns, trade discounts, rebates and include excise duty on manufactured products.

b) Revenue in respect of export sales is recognized on shipment of products.

c) Service Income (Processing Charges) is recognised as per contractual terms.

d) Dividend Income is recognised on receipt basis

e) Interest Income is recognised on time proportionate method.

D. Fixed Assets and Depreciation

a) Fixed Assets are stated at historical cost of acquisition/construction less accumulated depreciation and impairment loss. Cost (net of input tax credit received/receivable) includes related expenditure and pre-operative and project expenses for the period up to completion of die construction/assets are put to use.

b) Depreciation is provided on Written Down Value Method as per Section 205(2Xb), at the rates prescribed for single shift in Schedule XIV ofThe Companies Act, 1956.

c) Depreciation on addition/disposal of die Fixed Assets during die year is provided on prorata basis according to the period during which die assets are put to use.

E. Impairment of Assets

An asset is treated as impaired when die carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in die year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount

E Investments

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost Provision for diminution in die value of long-term investments is made only if such a decline is otiier than temporary.

G. Inventories

Raw Material, Packing Material, Stores and spare parts are valued at cost or net realizable value whichever is tower. Work-in-progress and Finished Goods inventories include production overheads, to the extent applicable. Cost of Raw Materials, Packing Materials and Stores & Spare part are determined on last purchase price.

H. Borrowing Costs

Borrowing Costs are recognized as an expense in die period in which tiiey are incurred except die borrowing cost attributable to die acquisition/ construction of a qualifying asset which are capitalized as part of die cost of such asset, up to die date, die assets are ready for their intended use.

I. Foreign Currency Transactions

The transactions in foreign currency are recorded at die exchange rates prevailing on the date of die transaction. The exchange difference resulting from settled transaction is adjusted in the profit and loss account Year end balances of monetary items are restated at the year end exchange rates and die resultant net gain or loss is adjusted in die profit and loss account

J. Taxation

Excise Duty and Value Added Tax(VAT):- Excise Duty and VAT is accounted net of purchase tax benefit availed on purchase inputs, fixed assets and eligible service.

Taxes on Income

a) Tax expenses comprises current and deferred tax.

b) Current Tax is measured as the amount expected to be paid in accordance widi die provisions of The Income Tax Act 1961.

c) Deferred Tax reflects die impact of current year timing differences between book and tax profits and reversal of timing difference of earlier years.

Deferred Tax is measured based on the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date.

d) Deferred Tax Assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

K. Retrraaeat Benefits

Contributions m respect of defined retirement schemes such as Provident Funds are charged to the Profit and loss Account as incurred. The company does not provide for gratuity as required under AS IS accounting guidelines prescribed by Institute of Chartered Accountants of India (ICAI). However, whenever an eligible employee retires/ resigns services the company computes liability for gratuity as per payment of gratuity Act, and charges it to the profit and loss accounts subject to Note no. 2 Business Transfer.

L. Employee Stock Option Plan

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on 'Accounting for Employee Share-based payments' issued by Institute of Chartered Accountants of India (ICAI) read with Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value if any, of die stock options as on the date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to the Profit and Loss Account on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

M. Provisions, Coalingf t Liabilities and Contingent Assets

Provisions involving sabstanual degree of estimation in measurement are recognized when tiiere is a present obligation as a result of past events and it is probable that mere wiH be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in die financial statements.

N. Earning! Per Share

The Company reports basic and diluted earnings per share in acc^rdaiK* with Acccounting Standard 20 on Earnings per Share. Basic earnings per share is computed by dividing the net Profit for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net Profit for the period by uk number of Equity shares outstanding during the year as adjusted for the effects of ail diluted potential equity shares.

O. Cash Flow Statement

The cash Flow Statement is prepared by die indirect method as set out in Accounting Standard 3 on Cash Flow statements and present cash flows by operating, investing A financing activities of the company.

P. Proposed Dnidead

Special Interim Dividend as recommended by the Board is provided in the Accounts. Further, the Board do not recommend any additional dividend for the financial year 2011-2012 and hence die said Special Interim Dividend be considered as the Final Dividend.


Mar 31, 2011

1) Accounting Convention

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in conformity with the accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules,2006 issued by the Central Government to the extent applicable and the relevant provisions of the Companies Act, 1956.

2) Use of Estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles(GAAP) in India requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of the financial statements and of the reported amounts of the revenues and expenses for the year. Actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively in current and future periods.

3) Revenue Recognition

a) Sales are recognized on completion of sale of goods and are recorded net of trade discounts, rebates, and excise duty on own manufactured products.

b) Revenue in respect of export sales is recognized on shipment of products.

c) Service Income (Processing Charges) is recognised as per contractual terms.

d) Dividend Income is recognised on receipt basis

e) Interest Income is recognised on time proportionate method.

4) Fixed Assets and Depreciation

a) Fixed Assets are stated at historical cost of acquisition/construction less accumulated depreciation and impairment loss. Cost (net of input tax credit received/receivable) includes related expenditure and pre-operative and project expenses for the period up to completion of the construction/assets are put to use.

b) Depreciation is provided on Written Down Value Method as per Section 205(2Xb), at the rates prescribed for single shift in Schedule XIV of The Companies Act, 1956.

c) Depreciation on addition/disposal of the Fixed Assets during the year is provided on prorata basis according to the period during which the assets are put to use.

d) The expenditure incidental to the expansion are allocated to Fixed Assets in the year of commencement of the commercial production.

5) Investments Investments are valued at cost.

6) Inventories

a) Raw Material, Packing Material, Stores and spare parts are valued at cost or net realisable value whichever is lower.

b) Work-in-progress and Finished Goods inventories include production overheads, to the extent applicable

c) Cost of Raw Materials, Packing Materials and Stores & Spare part are determined on last purchase price.

7) Miscellaneous Expenditure

Miscellaneous Expenditure is written off on a straight-line basis over a period of five years. -

8) Borrowing Costs

Borrowing Costs are recognized as an expense in the period in which they are incurred except the borrowing cost attributable to the acquisition/ construction of a qualifying asset which are capitalized as part of the cost of such asset, up to the date, the assets are ready for their intended use.

9) Foreign Currency Transactions

The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. The exchange difference resulting from settled transaction is adjusted in the profit and loss account. Year end balances of monetary items are restated at the year end exchange rates and the resultant net gain or loss is adjusted in the profit and loss account.

10) Taxation

a) Excise Duty :- Excise Duty is accounted net of Cenvat benefit availed on purchase inputs, fixed assets and eligible services

b) Value Added Tax |VAT| :- VAT is accounted net of VAT paid on purchases and Fixed Assets.

11) Taxes on Income

a) Tax expenses comprises current and deferred tax.

b) Current Tax is measured as the amount expected to be paid in accordance with the provisions of The Income Tax Act. 1961.

c) Deferred Tax reflects the impact of current year timing differences between book and tax profits and reversal of timing difference of earlier years. Deferred Tax is measured based on the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date.

d) Deferred Tax Assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred lax assets can be realized.

12) Retirement Benefits

Contributions in respect of defined retirement schemes such as Provident Funds are charged to the Profit and loss Account as incurred. The company does not provide for gratuity as required under AS 15 accounting guidelines prescribed by Institute of Chartered Accountants of India (ICAI). However, whenever an eligible employee retires / resigns services the company computes liability for gratuity as per payment of gratuity Act, and charges it to the profit and loss accounts.

13) Employee Stock Option Plan

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on 'Accounting for Employee Share-based payments' issued by Institute of Chartered Accountants of India (ICAI) read with Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value if any, of the stock options as on the date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to the Profit and Loss Account on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

14) Earnings Per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earnings per share is computed by dividing the net Profit for the period by the weighted average number of Equity shares outstanding during the period, as adjusted for the effects of all diluted potential equity shares.. Diluted earnings per share is computed by dividing the net Profit for the period by the number of Equity shares outstanding during the year.

15) Cash Flow Statement:

The cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow statements and present cash flows by operating, investing & financing activities of the company.

16) Proposed Dividend:

Dividend recommended by the Board of Directors is provided in the Accounts, pending approval of the Annual General Meeting.


Mar 31, 2010

1) Accounting Convention

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in conformity with the accounting principles generally accepted in India and comply with the accounting standards referred to in section 211(3C) of the Companies Act, 1956.

2) Revenue Recognition

a) Sales are recognized on completion of sale of goods and are recorded net of trade discounts, rebates, and excise duty on own manufactured products.

b) Revenue in respect of export sales is recognized on shipment of products.

c) Service Income (Processing Charges) is recognised as per contractual terms.

d) Dividend Income is recognised on receipt basis

e) Interest Income is recognised on time proportionate method.

3) Fixed Assets and Depreciation

a) Fixed Assets are stated at historical cost of acquisition/construction less accumulated depreciation and impairment loss. Cost (net of input tax credit received/receivable) includes related expenditure and pre-operative and project expenses for the period up to completion of the construction/assets are put to use.

b) Depreciation is provided on Written Down Value Method as per Section 205(2)(b), at the rates prescribed ixsr single shift in Schedule XIV of The Companies Act, 1956.

c) Depreciation on addition/disposal of the Fixed Assets during the year is provided on prorata basis according w the period during which the assets are put to use.

4) Investments

Investments are valued at cost.

5) Inventories

a) Raw Material, Packing Material, Stores and spare parts are valued at cost or net realisable value whichever is lower.

b) Work-in-process and Finished Goods inventories include production overheads, to the extend applicable

6) Miscellaneous Expenditure

Miscellaneous Expenditure is written off on a straight-line basis over a period of five years.

7) Borrowing Costs

Borrowing Costs are recognized as an expense in the period in which they are incurred except the borrowing cost attributable to the acquisition/ construction of a qualifying asset which are capitalized as part of the cost of such asset, up to the date, the assets are ready for their intended use..

8) Foreign Currency Transactions

The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. The exchange difference resulting from settled transaction is adjusted in the profit and loss account. Year end balances of monetary items are restated at the year end exchange rates and the resultant net gain or loss is adjusted in the profit and loss accounts

9) Taxation

a) Excise Duty :- Excise Duty is accounted net of Cenvat benefit availed on purchases inputs, fixed assets and eligible services

b) Value Added Tax [VAT| :- VAT is accounted net of VAT paid on purchases and Fixed Assets.

10) Income Tax

a) Tax expenses comprises current and deferred tax.

b) Current Tax is measured as the amount expected to be paid in accordance with the provisions of The Income Tax Act, 1961.

c) Deferred Tax reflects the impact of current year timing differences between book and tax profits and reversal of timing difference of earlier years. Deferred Tax is measured based on the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date.

d) Deferred Tax Assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

11) Retirement Benefits

Contributions in respect of defined retirement schemes such as Provident Funds are charged to the Profit and loss Account as incurred. The company does not provide for gratuity as required under AS 15 accounting guidelines prescribed by ICAI. However, whenever an digibale employee retires / resign services the company computes liability for gratuity as per payment of gratuity Act, and charges il to the profit and loss account.

12) Employee Stock Option Scheme

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on Accounting for Employee Share-based payments issued by Institute of Chartered Accountants of India (ICAI) read with Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value if any, of the stock options as on the date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to the Profit and Loss Account on vesting basis over the vesting period of the options. The un- amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

13) Earnings Per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share- Basic earnings per share is computed by dividing the net Profit for the period by the weighted average number of Equity shares outstanding during the period, as adjusted for the effects of all diluted potential equity shares. Diluted earnings per share is computed by dividing the net Profit for the period by the number of Equity shares outstanding during the year.

14) Cash Flow Statement:

The cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow statements and present cash flows by operating, investing & financing activities of the company.

15) Group / Classification

Previous years figures have been regrouped and "or" reclassified wherever necessary to conform to current years figures and classification.

16) Figures in bracket indicate previous year figures.