Mar 31, 2018
Significant accounting policies
1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 (Companies Indian Accounting Standard Rules, 2015) and other relevant provisions of the Act.
1.1 Historical Cost Convention
The financial statements have been prepared on the historical cost basis, except for Certain financial assets and liabilities that is measured at fair value.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates, judgements and assumptions effect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of circumstances surrounding the estimates. Changes in estimates are reflected in the financial statement in the period in which changes are made and if material, their effects are disclosed in the notes to the financial statements.
1.2 Current and non-current Classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is current when:
It is expected to be realised or intended to be sold or consumed in normal operating cycle or It is held primarily for the purpose of trading or
It is expected to be realised within twelve months after the reporting period, or
It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in normal operating cycle or It is held primarily for the purpose of trading or
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
1.3 Inventories
a) Raw Materials, Work-In-Progress and Finished Goods are valued at lower of the cost or net realisable value. Cost of raw materials comprises cost of purchase. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition.
b) Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
c) The basis of determining the cost is
Raw Materials : Weighted average cost
Stores and spares : Weighted average cost
Work in process and finished goods : Material cost plus appropriate share of labour and related overheads
1.4 Property plant and equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. Estimated useful life of the assets are as follows:
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
1.5 Revenue recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of GST, returns, trade allowances and rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. This coincides with the passing of possession to the buyer.
1.6 Expenditure
Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.
1.7 Intangible fixed assets
Product development expenses that are directly attributable to development and testing of new products are recognised as intangible assets when the expenditure attributable to the product during its development can be reliably measured . Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Amortisation is recognised on a straight line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
1.8 Capital work-in-progress:
Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
1.9 Interest Free Sales Tax Loan:
The sales tax collected on domestic sales of Companyâs products is treated as interest free sales tax loan from the AP State Government in accordance with the State Government incentive scheme. The amount credited to the loan account is based on the amounts collected as sales tax. The liability is measured at its fair value considering the discounting rate as 8% and is shown at is fair value in statement of assets and liabilities and the gain/(loss) is accounted as Other Comprehensive Income.
1.10 Foreign Exchange Transaction:
All the Foreign Exchange transactions entered into during the current financial year are accounted at the exchange rate prevailing on the date of documentation/invoicing. Foreign Exchange Fluctuation on transactions entered into during the current financial year and received/paid during the year are accounted in the current financial year. The outstanding foreign currency debtors are restated at the Foreign Currency Rates prevailing at the end of the year and the Foreign Exchange Fluctuation on the same is also recognised at the end of the year in conformity with Indian Accounting Standards and foreign currency debtors which are doubtful at the end of the year are not restated at the foreign currency rates prevailing at the end of the year.
1.11 Employee Benefits:
Contribution to âDefined Contribution Schemesâ such as Provident Fund is charged to the profit and loss account as incurred. Provident Fund contribution is made to the Government Administered Provident Fund. Company has no further obligation beyond this contribution charged in financial statement.
Company also provides for Retirement Benefits in the form of Gratuity. Such Benefits are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.
Short term employee benefits including leave are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related services are rendered.
1.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.
1.13 Financial Assets & Financial Liabilities Initial recognition and measurement
All financial assets and liabilities are recognised initially at fair value.
In the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset is treated as cost of acquisition. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Debt instruments at amortised cost
- Debt instruments at fair value through other comprehensive income (FVTOCI)
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI) Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
1.14 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.
For the purpose of calculating diluted earning per share, the net profit for the year attributable to equity shareholders and the weighted average number of Equity Shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.15 Taxes on income
âCurrent Tax:â The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.âDeferred Tax : âDeferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. For items recognised in OCI or equity, deferred/ current tax is also recognised in OCI or equity. âMAT Creditâ Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is reasonable certainty that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. The MAT credit to the extent there is reasonable certainty that the Company will utilise the credit is recognised in the Statement of Profit and Loss and corresponding debit is done to the Deferred Tax Asset as unused tax credit.
1.16 Impairment of assets
Assets subject to amortization/ depreciation are tested for impairment provided that an event or change in circumstances indicates that their carrying amount might not be recoverable. An impairment loss is recognized in the amount by which the assetâs carrying amount exceeds its recoverable amount. The recoverable amount is the higher between an assetâs fair value less sale costs and value in use. For the purposes of assessing impairment, assets are grouped together at the lowest level for which there are separately identifiable cash flows (cash-generating units). Nonfinancial assets other than goodwill for which impairment losses have been recognized are tested at each balance sheet date in the event that the loss has reversed.
1.17 Provisions and contingencies
A provision is recognised when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.
1.18 R & D Expenditure
Revenue expenditure on research and development is charged to Statement of Profit and Loss in the year in which it is incurred. Capital expenditure on research and development is considered as an addition to property, plant & equipment/ intangible assets.
1.19 Dividends
Provision shall be made in the accounts for the dividends payable by the company as and when recommended by the Board of Directors, pending approval of the share holders at the Annual General Meeting.
a) Additions in the current year 2017-18 of Rs.20.68 lakhs incurred towards development expenses on key products.
b) Product Development expenses of certain key products amortized for a period of 10 years starting from the FY 2017-18 on pro rate basis.
c) Amortisation expenses of Rs 41.98 lakhs includes Job Work Charges received Rs.21.86 lakhs against Trail batches.
The Company uses a provision matrix to determine impairment loss on portfolio of its trade receivable. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward - looking estimates. At every reporting date, the historical observed default rates are updated and changes in forward- looking estimates are analysed.
Mar 31, 2016
1 Corporate information
Krebs Biochemicals & Industries Ltd has been incorporated on 2nd December 1991. At present the company is engaged in the business of manufacture of active pharmaceutical ingredients. The company has two manufacturing facilities one at Regadichelaka, Nellore (Dist) and another one at Kothapalli Village, Kasimkota Mandal, Vishakapatnam (Dist)
2 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous years.
3 Significant accounting policies
3.1 Use of estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialized.
3.2 Inventories
As per AS-2, Raw Materials, Work-In-Progress and Finished Goods are valued at lower of the cost or net realizable value.
3.3 Depreciation and amortization
Depreciation has been calculated on straight-line method at the rates specified in Schedule II to the Companies Act, 2013 for the Financial Year ending 31st March 2016. The useful life of the assets adopted by the company is as per schedule II of the Companies Act, 2013 and as follows:
3.4 Revenue recognition
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer. This coincides with the passing of possession to the buyer.
3.5 Expenditure
Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.
3.6 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. Fixed assets acquired and put to use for project purpose are capitalized and depreciation thereon is included in the project cost till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are recorded at the fair market value or the net book value of the asset given up, adjusted for any balancing cash consideration. Fair market value is determined either for the assets acquired or asset given up, whichever is more clearly evident. Fixed assets acquired in exchange for securities of the Company are recorded at the fair market value of the assets or the fair market value of the securities issued, whichever is more clearly evident.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
3.7 Interest Free Sales Tax Loan:
The sales tax collected on domestic sales of Company''s products is treated as interest free sales tax loan from the AP State Government in accordance with the State Government incentive scheme. The amount credited to the loan account is based on the amounts collected as sales tax. Final amount of loan will be arrived at only on completion of sales tax assessments.
3.8 Foreign Exchange Transaction:
All the Foreign Exchange transactions entered into during the current financial year are accounted at the exchange rate prevailing on the date of documentation/invoicing. Foreign Exchange Fluctuation on transactions entered into during the current financial year and received/paid during the year are accounted in the current financial year. The outstanding foreign currency debtors are restated at the Foreign Currency Rates prevailing at the end of the year and the Foreign Exchange Fluctuation on the same is also recognized at the end of the year in conformity with the revised Accounting Standard 11 and foreign currency debtors which are doubtful at the end of the year are not restated at the foreign currency rates prevailing at the end of the year.
3.9 Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
3.10 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
3.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.
Current and deferred tax relating to items directly recognized in equity are recognized in equity and not in the Statement of Profit and Loss.
3.12 Impairment of assets
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.
3.13 Provisions and contingencies
A provision is recognized when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.
3.14 R & D Expenditure
Expenditure in the nature of capital items is debited to respective fixed assets and depreciated at applicable rates. Revenue expenditure is charged to Profit and Loss Account of the year in which they are incurred.
3.15 Dividends
Provision shall be made in the accounts for the dividends payable by the company as and when recommended by the Board of Directors, pending approval of the share holders at the Annual General Meeting.
Mar 31, 2015
1.1 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialised.
1.2 Inventories
As per AS-2, Raw Materials, Work-In-Progress and Finished Goods are
valued at lower of the cost or net realisable value.
1.3 Depreciation and amortisation
Depreciation has been calculated on straight-line method at the rates
specified in Schedule II to the Companies Act, 2013 for the 6 months
ending 31st March 2015. The useful life of the assets adopted by the
company is as per schedule II of the Companies Act, 2013 and as follows
:
1.4 Revenue recognition
Revenue from the sale of goods is recognised when the significant risks
and rewards of ownership have been transferred to the buyer. This
coincides with the passing of possession to the buyer.
1.5 Expenditure
Expenses are accounted on accrual basis and provision is made for all
known losses and liabilities.
1.6 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
Capital work-in-progress :
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
1.7 Interest Free Sales Tax Loan :
The sales tax collected on domestic sales of Company's products is
treated as interest free sales tax loan from the AP State Government in
accordance with the State Government incentive scheme. The amount
credited to the loan account is based on the amounts collected as sales
tax. Final amount of loan will be arrived at only on completion of
sales tax assessments.
1.8 Foreign Exchange Transaction :
All the Foreign Exchange transactions entered into during the current
financial year are accounted at the exchange rate prevailing on the
date of documentation/invoicing. Foreign Exchange Fluctuation on
transactions entered into during the current financial year and
received/paid during the year are accounted in the current financial
year. The outstanding foreign currency debtors are restated at the
Foreign Currency Rates prevailing at the end of the year and the
Foreign Exchange Fluctuation on the same is also recognised at the end
of the year in conformity with the revised Accounting Standard 11 and
foreign currency debtors which are doubtful at the end of the year are
not restated at the foreign currency rates prevailing at the end of the
year.
1.9 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
1.10 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
1.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
1.12 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.13 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and 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 (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.14 R & D Expenditure
Expenditure in the nature of capital items is debited to respective
fixed assets and depreciated at applicable rates. Revenue expenditure
is charged to Profit and Loss Account of the year in which they are
incurred.
1.15 Dividends
Provision shall be made in the accounts for the dividends payable by
the company as and when recommended by the Board of Directors, pending
approval of the share holders at the Annual General Meeting.
1.16 Excise Duty
Excise Duty on closing stock of Finished Goods has been provided in the
accounts and corresponding increase in closing stock valuation has been
given effect.
Sep 30, 2014
1.1 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialised.
1.2 Inventories
Raw Materials & Work-In-Progress are valued at cost and Finished Goods
are valued at lower of the cost or net realisable value.
1.3 Depreciation and amortisation
Depreciation has been provided on straight-line method at the rates
specified in Schedule XIV to the Companies Act, 1956 up to December,
2012 in respect of Unit - II and up to June, 13 in respect of Unit - I
during the Financial year ending 30.06.2013. The depreciation not
provided in the books for the Accounting Year ending 30th Sept 2014 in
respect of both the units amounting to Rs.1184.38 lacs.
1.4 Revenue recognition
Revenue from the sale of goods is recognised when the significant risks
and rewards of ownership have been transferred to the buyer. This
coincides with the passing of possession to the buyer.
1.5 Expenditure
Expenses are accounted on accrual basis and provision is made for all
known losses and liabilities.
1.6 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. . Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
1.7 Interest Free Sales Tax Loan:
The sales tax collected on domestic sales of Company''s products is
treated as interest free sales tax loan from the AP State Government in
accordance with the State Government incentive scheme. The amount
credited to the loan account is based on the amounts collected as sales
tax. Final amount of loan will be arrived at only on completion of
sales tax assessments.
1.8 Foreign Exchange Transaction:
All the Foreign Exchange transactions entered into during the current
financial year are accounted at the exchange rate prevailing on the
date of documentation/invoicing. Foreign Exchange Fluctuation on
transactions entered into during the current financial year and
received/paid during the year are accounted in the current financial
year. The outstanding foreign currency debtors are restated at the
Foreign Currency Rates prevailing at the end of the year and the
Foreign Exchange Fluctuation on the same is also recognised at the end
of the year in conformity with the revised Accounting Standard 11 and
foreign currency debtors which are doubtful at the end of the year are
not restated at the foreign currency rates prevailing at the end of the
year.
1.9 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
1.10 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
1.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with it will flow
to the Company. Deferred tax is recognised on timing differences, being
the differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
1.12 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.13 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and 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 (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.14 R & D Expenditure
Expenditure in the nature of capital items is debited to respective
fixed assets and depreciated at applicable rates. Revenue expenditure
is charged to Profit and Loss Account of the year in which they are
incurred.
1.15 Dividends
Provision shall be made in the accounts for the dividends payable by
the company as and when recommended by the Board of Directors, pending
approval of the share holders at the Annual General Meeting.
1.16 Excise Duty
Excise Duty on closing stock of Finished Goods has been provided in the
accounts and corresponding increase in closing stock valuation has been
given effect.
Mar 31, 2012
1.1 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialised.
1.2 Inventories
Raw Materials & Work-In-Progress are valued at cost and Finished Goods
are valued at lower of the cost or net realisable value.
1.3 Depreciation and amortisation
Depreciation has been provided on straight-line method at the rates
specified in Schedule XIV to the Companies Act, 1956.
1.4 Revenue recognition
Revenue from the sale of goods is recognised when the significant risks
and rewards of ownership have been transferred to the buyer. This
coincides with the passing of possession to the buyer.
1.5 Expenditure
Expenses are accounted on accrual basis and provision is made for all
known losses and liabilities.
1.6 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
1.7 Interest Free Sales Tax Loan:
The sales tax collected on domestic sales of Company's products is
treated as interest free sales tax loan from the AP State Government in
accordance with the State Government incentive scheme. The amount
credited to the loan account is based on the amounts collected as sales
tax. Final amount of loan will be arrived at only on completion of
sales tax assessments.
1.8 Foreign Exchange Transaction:
All the Foreign Exchange transactions entered into during the current
financial year are accounted at the exchange rate prevailing on the
date of documentation/invoicing. Foreign Exchange Fluctuation on
transactions entered into during the current financial year and
received/paid during the year are accounted in the current financial
year. The outstanding foreign currency debtors are restated at the
Foreign Currency Rates prevailing at the end of the year and the
Foreign Exchange Fluctuation on the same is also recognised at the end
of the year in conformity with the revised Accounting Standard 11 and
foreign currency debtors which are doubtful at the end of the year are
not restated at the foreign currency rates prevailing at the end of the
year.
1.9 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying
assets, pertaining to the period from commencement of activities
relating to construction / development of the qualifying asset upto the
date of capitalisation of such asset is added to the cost of the
assets. Capitalisation of borrowing costs is suspended and charged to
the Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
1.10 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
1.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with it will flow
to the Company.Deferred tax is recognised on timing differences, being
the differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
1.12 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.13 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and 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 (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.14 R & D Expenditure
Expenditure in the nature of capital items is debited to respective
fixed assets and depreciated at applicable rates. Revenue expenditure
is charged to Profit and Loss Account of the year in which they are
incurred.
1.15 Dividends
Provision shall be made in the accounts for the dividends payable by
the company as and when recommended by the Board of Directors, pending
approval of the share holders at the Annual General Meeting.
1.16 Excise Duty
Excise Duty on closing stock of Finished Goods has been provided in the
accounts and corresponding increase in closing stock valuation has been
given effect.
Mar 31, 2010
A) Basis for preparation of financial statements:
The financial statements have been prepared under the historical cost
conventions in accordance with the Accounting Standards issued by the
Institute of chartered Accountants of India and the provisions of the
Companies Act, 1956 as adopted consistently by the Company. All income
and expenditure having a material bearing on the financial statements
are recognised on accrual basis.
b) Revenue Recognition:
Revenue from the sale of goods is recognised when the significant risks
and rewards of ownership have been transferred to the buyer. This
coincides with the passing of possession to the buyer.
c) Expenditure:
Expenses are accounted on accrual basis and provision is made for all
known losses and liabilities.
d) Fixed Assets:
Fixed Assets are shown at cost less depreciation. Cost comprises the
Purchase Price and other attributable expenses and expenditure during
construction period.
e) Depreciation:
Depreciation has been provided on straight-line method at the rates
specified in Schedule XIV to the Companies Act, 1956.
f) Interest Free Sales Tax Loan:
The sales tax collected on domestic sales of Companys products is
treated as interest free sales tax loan from the AP State Government in
accordance with the State Government incentive scheme. The amount
credited to the loan account is based on the amounts collected as sales
tax. Final amount of loan will be arrived at only on completion of
sales tax assessments.
g) Inventories:
Raw Materials & Work-in-Progress are valued at cost and Finished Goods
are valued at lower of the cost or net realisable value.
h) Foreign Exchange Transaction:
All the Foreign Exchange transactions entered into during the current
financial year are accounted at the exchange rate prevailing on the
date of documentation/invoicing. Foreign Exchange Fluctuation on
transactions entered into during the current financial year and
received/paid during the year are accounted in the current financial
year. The outstanding foreign currency debtors are restated at the
Foreign Currency Rates prevailing at the end of the year and the
Foreign Exchange Fluctuation on the same is
also recognised at the end of the year in conformity with the revised
Accounting Standard 11 and foreign currency debtors which are doubtful
at the end of the year are not restated at the foreign currency rates
prevailing at the end of the year.
i) Miscellaneous Expenditure:
During the year under review the company has not incurred any
expenditure of nature which can be deferred and capitalised.
j) R&D Expenditure:
Expenditure in the nature of capital items is debited to respective
fixed assets and depreciated at applicable rates. Revenue expenditure
is charged to Profit and Loss Account of the year in which they are
incurred.
k) Dividends:
Provision shall be made in the accounts for the dividends payable by
the company as and when recommended by the Board of Directors, pending
approval of the share holders at the Annual General Meeting.
l) Excise Duty:
Excise Duty on closing stock of Finished Goods has been provided in the
accounts and corresponding increase in closing stock valuation has been
given effect.