Mar 31, 2018
NOTES TO STANDALONE FINANCIAL STATEMENTS DESCRIPTION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES A. General Information
Ortin Laboratories Limited(the company) is engaged in the manufacturing and trading of Pharmaceuticals, Drugs and Intermediates. The Company is a public limited company incorporated and domiciled in India and has its registered office at Barkathpura,Hyderabad. The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
B. Basis of preparation and presentation of Financial Statements
The financial statements of Ortin Laboratories Limited ( the company) have been prepared and presented in accordance with the Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read with Rule 7 of Companies (Accounts) Rules, 2014. These are the company''s first annual financial statements prepared in accordance with Indian Accounting Standards (Ind AS). The Company has adopted all applicable standards and the adoption was carried out in accordance with Ind AS 101 - âFirst Time Adoption of Indian Accounting Standards''. An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company are provided in Note numbers 2.25 to 2.34 of First Time Adoption.
Basis of Measurement
These financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items in the balance sheet:
- Certain financial assets are measured either at fair value or at amortized cost depending on the classification;
- Employee defined benefit assets/(liability) are recognized as the net total of the fair value of plan assets, plus actuarial losses, less actuarial gains and the present value of the defined benefit obligation and
All assets and liabilities are classified into current and non-current based on the operating cycle of less than twelve months or based on the criteria of realization/settlement within twelve months period from the balance sheet date.
C. Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experiences and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, the areas involving critical estimates or Judgments are:
i) Depreciation and amortization
Depreciation and amortization is based on management estimates of the future useful lives of certain class of property, plant and equipment and intangible assets.
ii) Employee Benefits
The present value of the employee benefits obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) includes the discount rate, wage escalation and employee attrition. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.
iii) Provision and contingencies
Provisions and contingencies are based on the Management''s best estimate of the liabilities based on the facts known at the balance sheet date.
iv) Fair valuation
Fair value is the market based measurement of observable market transaction or available market information.
D. Functional and presentation currency
These financial statements are presented in Indian rupees, which is also the functional currency of the Company. All financial information presented in Indian rupees has been rounded to the nearest lakhs.
E. Current and noncurrent classification
All the assets and liabilities have been classified as current or noncurrent as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013and Ind AS 1, Presentation of financial statements.
Assets: An asset is classified as current when it satisfies any of the following criteria:
- It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;
- It is held primarily for the purpose of being traded;
- It is expected to be realized within twelve months after the reporting date; or
- It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
Liabilities: A liability is classified as current when it satisfies any of the following criteria:
- It is expected to be settled in the Companyâs normal operating cycle;
- It is held primarily for the purpose of being traded;
- It is due to be settled within twelve months after the reporting date; or
- The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of noncurrent assets/ liabilities respectively. All other assets/ liabilities are classified as noncurrent. Deferred tax assets and liabilities are always disclosed as noncurrent.
F. Foreign Currency Transaction
Transactions in foreign currencies are translated to the respective functional currencies of entities within the Comp-any at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in the statement of profit and loss in the period in which they arise.
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction, if any.
Significant Accounting Policies
1) Property Plant & Equipment
Transition to Ind AS
The Company has elected to continue with the net carrying value of all its property, plant and equipment recognized as of April 1, 2016 (transition date) as per the previous GAAP and use that carrying value as its deemed cost.
Recognition and measurement
Property, Plant and Equipment are stated at cost of acquisition or construction less accumulated depreciation and impairment loss, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset i.e., freight, duties and taxes applicable and other expenses related to acquisition and installation. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to a working condition for its intended use. Borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalized as part of the cost of that asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within in the statement of profit and loss.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognized in the statement of profit and loss as incurred.
Items of property, plant and equipment acquired through exchange of nonmonetary assets are measured at fair value, unless the exchange transaction lacks commercial substance or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of the asset given up.
Depreciation
Depreciation is recognized in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant and equipment based on Schedule II to the Companies Act, 2013 (âScheduleâ), which prescribes the useful lives for various classes of tangible assets. For assets acquired or disposed of during the year, depreciation is provided on prorate basis. Land is not depreciated.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if appropriate.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other noncurrent assets. The cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
2) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, 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. 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 recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
Debt instrument at FVTPL
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profited loss. The Company has not designated any debt instrument as at FVTPL.
Investment in equity instruments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments i.e., investments in equity shares within the FVTPL category are measured at fair value with all changes recognized in the statement of profited loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company''s balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Impairment of trade receivables
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18. Expected credit loss model takes into consideration the present value of all the cash shortfalls over the expected life of a financial instrument. In simple terms, it is weighted average of credit losses with the respective risks of default occurring as weights. The credit loss is the difference between all contractual cash flows that are due to an entity as per the contract and all the contractual cash flows that the entity expects to receive, discounted to the effective interest rate. The Standard presumes that entities would suffer credit loss even if the entity expects to be paid in full but later than when contractually due. In other words, it simply focuses on DELAYS in collection of receivables.
For the purpose of identifying the days of delay, the Company took into consideration the weighted average number of delays taking into consideration the date of billing, the credit period and the collection days.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized as well as through the EIRamortisation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral partof the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
3) Inventories
Inventories consist of raw materials, stores and spares, work-in-progress and finished goods and are measured at the lower of cost and net realizable value. The cost of all categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based on normal operating capacity. Stores and spares, that do not qualify to be recognized as property, plant and equipment, consists of packing materials, engineering spares (such as machinery spare parts) and consumables which are used in operating machines or consumed as indirect materials in the manufacturing process. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
4) Impairment of non-financial assets
The carrying amounts of the Companyâs non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, an impairment test is performed each year at March 31.
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the cash-generating unit. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ).
An impairment loss is recognized in the statement of profit and loss if the estimated recoverable amount of an asset or its cash-generating unit is lower than its carrying amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
5) Cash & Cash Equivalents
Cash and bank balances comprise of cash balance in hand, in current accounts with banks, demand deposit, short-term deposits, Margin Money deposits and unclaimed dividend accounts. For this purpose, âshort-termâ means investments having maturity of three months or less from the date of investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. The Margin money deposits and unclaimed dividend balances shall be disclosed as restricted cash balances. \
6) Employee Benefits
Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined Contribution Plan
The Company''s contributions to defined contribution plans are charged to the statement of profit and loss as and when the services are received from the employees.
Defined Benefit Plans
The liability in respect of defined benefit plans and other post-employment benefits is calculated using the projected unit credit method consistent with the advice of qualified actuaries. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates based on prevailing market yields of Indian Government Bonds and that have terms to maturity approximating to the terms of the related defined benefit obligation. The current service cost of the defined benefit plan, recognized in the statement of profit and loss in employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in income. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
Termination benefits
Termination benefits are recognized as an expense when the Company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the Company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.
Other long-term employee benefits
The Companyâs net obligation in respect of other long term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and previous periods. That benefit is discounted to determine its present value. Re-measurements are recognized in the statement of profit and loss in the period in which they arise.
7) Provisions, contingent liabilities and contingent assets
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets
Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.
8) Revenue Recognition
Sale of goods and trade license
Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of the product is transferred to the customer. Revenue from the sale of Products includes excise duty and is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts and allowances.
Revenue from export sales and other sales outside of India is recognized when the significant risks and rewards of ownership of products are transferred to the customers, which occurs upon delivery of the products to the customers unless the terms of the applicable contract provide for specific revenue generating activities to be completed, in which case revenue is recognized once all such activities are completed.
Revenue from sale of trade license (duty scripts) is recognized in when the amount of revenue can be reliably measured, when it is probable that future economic benefits will flow to the entity.
Other Income Interest Income
Interest Income mainly comprises of interest on Margin money deposit with banks relating to bank guarantee. Interest income should be recorded using the effective interest rate (EIR).However, the amount of margin money deposits relating to bank guarantee are purely current in nature, hence effective interest rate has not been applied. Interest is recognized using the time-proportion method, based on rates implicit in the transactions.
Dividend
Dividend income is recognized when the Company''s right to receive dividend is established.
9) Borrowing Costs
Borrowing costs consist of interest, ancillary and other costs that the Company incurs in connection with the borrowing of funds and interest relating to other financial liabilities. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
10) Tax Expenses
Tax expense consists of current and deferred tax.
Income Tax
Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred Tax
Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Dividend distribution tax arising out of payment of dividends to shareholders under the Indian Income tax regulations is not considered as tax expense for the Company and all such taxes are recognized in the statement of changes in equity as part of the associated dividend payment.
11) Earnings Per Share
The Company presents basic and diluted earnings per share (âEPSâ) data for its ordinary shares. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
12) Trade receivables
Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using effective interest method, less provision for impairment.
13) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Determination of fair values
The Companyâs accounting policies and disclosures require the determination of fair value, for certain financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
(i) Property, plant and equipment
Property, plant and equipment, if acquired in a business combination or through an exchange of non-monetary assets, is measured at fair value on the acquisition date. For this purpose, fair value is based on appraised market values and replacement cost.
(ii) Intangible assets
The fair value of brands, technology related intangibles, and patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of these brands, technology related intangibles, patents or trademarks being owned (the ârelief of royalty methodâ). The fair value of customer related, product related and other intangibles acquired in a business combination has been determined using the multi-period excess earnings method after deduction of a fair return on other assets that are part of creating the related cash flows.
(iii) Inventories
The fair value of inventories acquired in a business combination is determined based on its estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.
(iv) Investments in equity and debt securities and units of mutual funds
The fair value of marketable equity and debt securities is determined by reference to their quoted market price at the reporting date. For debt securities where quoted market prices are not available, fair value is determined using pricing techniques such as discounted cash flow analysis.
In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.
Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds.
(v) Derivatives
The fair value of foreign exchange forward contracts is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). The fair value of foreign currency option and swap contracts and interest rate swap contracts is determined based on the appropriate valuation techniques, considering the terms of the contract.
(vi) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements. In respect of the Company''s borrowings that have floating rates of interest, their fair value approximates carrying value.
Mar 31, 2016
NOTES FORMING PART OF FINANCIAL STATEMENTS:. NOTE 1: CORPORATE INFORMATION:
Ortin Laboratories Limited (âThe Companyâ) was incorporated on 27th October, 1986 and the CIN being L24110TG1986PLC006885. The Company is engaged in the business of Manufacturing and trading of Pharmaceuticals, Drugs and Intermediates.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES: a) Basis of Accounting:
The financial statements have been prepared and presented under the historic cost convention on accrual basis to comply in all material respects with the notified Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Accounting Policies have been consistently applied by the Company and are consistent with those used in the previous year. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013.
b) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of Assets or Liabilities in the Future periods.
c) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding CENVAT, VAT and Subsidy), including financing costs till commencement of commercial production and adjustments arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalized.
d) Depreciation:
The Company has provided depreciation for all the assets using straight line method as per the provisions specified in the Schedule II of the Companies Act, 2013.
e) Inventories:
Inventories have been taken as valued and certified by the Management. The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or net realizable value whichever is lower.
Finished goods - at cost or net realizable value on FIFO basis whichever is lower.
f) Retirement benefits:
(i) Company''s contribution to provident fund is charged to Profit & Loss Account.
(ii) Provision has been made in accounts for the future payment of gratuity to the employees of the Company, Pursuant to the payment of Gratuity Act, 1972 however provision has not been made based on the actuarial valuation.
g) Revenue recognition:
Turnover is recognized on dispatch of products and is exclusive of Excise Duty.
Interest income is recognized on accrual basis.
Dividend income is recognized as and when the right to receive the amount is established.
h) Investments:
Current Investments are valued at cost or market price whichever is lower and in the absence of market quotation, cost price is adopted. Long Term Investments are valued at cost.
i) R&D Expenditure:
Capital expenditure is included in the fixed assets and depreciation as per Company''s policy. Revenue expenditure is charged to profit & loss account of the year in which they are incurred and included in the respective heads of expenditure.
j) Borrowing Costs:
Borrowings costs that are directly attributable to the acquisition of qualifying assets are capitalized as part of cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.
k) Cash Flow Statement:
The Cash Flow Statement has been compiled with and is based on the Balance Sheet as at 31st March, 2016 and the related Profit and Loss Account for the year ended on that date. The Cash Flow Statement has been prepared under the indirect method as set out in the Accounting Standard - 3 on Cash Flow statement issued by ICAI.
l) Accounting for Taxes on Income:
Current Tax: Provision for Current Income Tax is made on the basis of the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.
Deferred Tax: Deferred income tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The tax effect is calculated on the accumulated timing differences at the yearend based on tax rates and laws. Enacted or substantially enacted as of the Balance Sheet date.
m) Employee Stock Option Scheme:
The company accounts for equity settled stock options as per the accounting treatment prescribed by Securities and Exchange Board of India (share based employee benefits) Regulations, 2014 and the Guidance Note on Employee Share-based Payments issued by the Institute of Chartered Accountants of India.
n) Impairment of Assets:
The management assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.
o) Government Grants & Other Claims:
Revenue grants including subsidy/rebates, refunds, claims etc., are credited to profit & loss account under other income or deducted from the related expenses. Grants related to fixed assets are credited to capital reserves account or adjusted in the cost of such assets as the case may be, as and when the ultimate reliability of such grants etc., are established/realized.
p) Miscellaneous Expenses:
Miscellaneous expenses and expenditure in connection with Public issue and issue of shares are being written off over a period of five years.
q) Provisions and Contingent Liabilities and Contingent Assets:
Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of obligations and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but if material, are disclosed in the notes to accounts. Contingent assets are not recognized or disclosed in the financial statements.
r) Cash and Cash Equivalents:
Cash and cash equivalents comprise of cash at bank and cash in hand. The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase, to be cash equivalents.
s) Leases:
Lease rentals in respect of assets acquired under operating lease are charged to Statement of Profit and Loss.
t) Intangible Assets:
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized as per Accounting Standard 26.
u) Segment reporting:
The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the company. Further,
(i) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market based.
(ii) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the company as a whole and are not allocable to segments on a reasonable basis, have been included under âUn-allocated corporate expenses net of un-allocated incomeâ.
v) Earnings per share:
Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basis earning per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive.
w) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Net exchange gain or loss resulting in respect of foreign exchange translations settled during period is recognized in the profit & loss account except for the net exchange gain or loss on account of imported fixed assets, which is adjusted in the carrying amount of the related fixed assets. Foreign currency denominated current assets and current liabilities at the period end are translated at the period end exchange rates and the resulting net gain or loss is recognized in the profit & loss account, except for exchange difference related to fixed assets purchased from foreign countries is adjusted in the carrying amount of related fixed assets.
Mar 31, 2015
A) Basis of Accounting:
The financial statements have been prepared and presented under the
historic cost convention on accrual basis to comply in all material
respects with the notified Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014. The Accounting Policies have been consistently applied by the
Company and are consistent with those used in the previous year. All
assets and liabilities have been classified as current or non-current
as per the Company's normal operating cycle and other criteria set out
in the Schedule III of the Companies Act, 2013.
b) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets, and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of Assets or
Liabilities in the Future periods.
c) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding
CENVAT, VAT and Subsidy), including financing costs till commencement
of commercial production and adjustments arising from exchange rate
variations relating to borrowings attributable to the fixed assets are
capitalized.
d) Depreciation:
The Company has provided depreciation for all the assets using straight
line method as per the provisions specified in the Schedule II of the
Companies Act, 2013.
e) Inventories:
Inventories have been taken as valued and certified by the Management.
The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or net realizable value
whichever is lower.
Finished goods - at cost or net realizable value on FIFO basis
whichever is lower.
f) Retirement benefits:
(i) Company's contribution to provident fund is charged to Profit &
Loss Account.
(ii) Provision has been made in accounts for the future payment of
gratuity to the employees of the Company, Pursuant to the payment of
Gratuity Act, 1972 however provision has not been made based on the
actuarial valuation.
g) Revenue recognition:
Turnover is recognized on dispatch of products and is exclusive of
Excise Duty.
Interest income is recognized on accrual basis.
Dividend income is recognized as and when the right to receive the
amount is established.
h) Investments:
Current Investments are valued at cost or market price whichever is
lower and in the absence of market quotation, cost price is adopted.
Long Term Investments are valued at cost.
i) R&D Expenditure:
Capital expenditure is included in the fixed assets and depreciation as
per Company's policy. Revenue expenditure is charged to profit & loss
account of the year in which they are incurred and included in the
respective heads of expenditure.
j) Borrowing Costs:
Borrowings costs that are directly attributable to the acquisition of
qualifying assets are capitalized as part of cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
k) Cash Flow Statement:
The Cash Flow Statement has been compiled with and is based on the
Balance Sheet as at 31st March, 2015 and the related Profit and Loss
Account for the year ended on that date. The Cash Flow Statement has
been prepared under the indirect method as set out in the Accounting
Standard - 3 on Cash Flow statement issued by ICAI.
l) Accounting for Taxes on Income:
Current Tax: Provision for Current Income Tax is made on the basis of
the taxable income for the year as determined in accordance with the
provisions of Income Tax Act, 1961.
Deferred Tax: Deferred income tax is recognized, on timing differences,
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. The tax effect is calculated on the accumulated
timing differences at the year end based on tax rates and laws. Enacted
or substantially enacted as of the Balance Sheet date.
m) Employee Stock Option Scheme:
The company accounts for equity settled stock options as per the
accounting treatment prescribed by Securities and Exchange Board of
India (share based employee benefits) Regulations, 2014 and the
Guidance Note on Employee Share-based Payments issued by the Institute
of Chartered Accountants of India.
n) Impairment of Assets:
The management assesses using external and internal sources whether
there is any indication that an asset may be impaired. Impairment of an
asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its
eventual disposal. The provision for impairment loss is made when
recoverable amount of the asset is lower than the carrying amount.
o) Government Grants & Other Claims:
Revenue grants including subsidy/rebates, refunds, claims etc., are
credited to profit & loss account under other income or deducted from
the related expenses. Grants related to fixed assets are credited to
capital reserves account or adjusted in the cost of such assets as the
case may be, as and when the ultimate realisability of such grants
etc., are established/ realized.
p) Miscellaneous Expenses:
Miscellaneous expenses and expenditure in connection with Public issue
and issue of shares are being written off over a period of five years.
q) Provisions and Contingent Liabilities and Contingent Assets:
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of obligations and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but if
material, are disclosed in the notes to accounts. Contingent assets are
not recognized or disclosed in the financial statements.
r) Cash and Cash Equivalents:
Cash and cash equivalents comprise of cash at bank and cash in hand.
The Company considers all highly liquid investments with an original
maturity of three months or less from date of purchase, to be cash
equivalents.
s) Leases:
Lease rentals in respect of assets acquired under operating lease are
charged to Statement of Profit and Loss.
t) Intangible Assets:
Intangible assets are stated at acquisition cost, net of accumulated
amortization and accumulated impairment losses, if any. Intangible
assets are amortized as per Accounting Standard 26.
u) Segment reporting:
The accounting policies adopted for segment reporting are in conformity
with the accounting policies adopted for the company. Further,
(i) Inter segment revenue has been accounted for based on the
transaction price agreed to between segments which is primarily market
based.
(ii) Revenue and expenses have been identified to segments on the basis
of their relationship to the operating activities of the segment.
Revenue and expenses, which relate to the company as a whole and are
not allocable to segments on a reasonable basis, have been included
under "Un-allocated corporate expenses net of un-allocated income".
v) Earnings per share:
Basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises the
weighted average number of shares considered for deriving basis earning
per share and also the weighted average number of equity shares, which
may be issued on the conversion of all dilutive potential shares,
unless the results would be anti dilutive.
w) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. Net exchange gain or loss
resulting in respect of foreign exchange translations settled during
period is recognized in the profit & loss account except for the net
exchange gain or loss on account of imported fixed assets, which is
adjusted in the carrying amount of the related fixed assets. Foreign
currency denominated current assets and current liabilities at the
period end are translated at the period end exchange rates and the
resulting net gain or loss is recognized in the profit & loss account,
except for exchange difference related to fixed assets purchased from
foreign countries is adjusted in the carrying amount of related fixed
assets.
Mar 31, 2014
A) Basis of Accounting:
The financial statements have been prepared and presented under the
historic cost convention on accrual basis to comply in all material
respects with the notified Accounting Standards by the Companies
(Accounting Standard) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The Accounting Policies have
been consistently applied by the Company and are consistent with those
used in the previous year. All assets and liabilities have been
classified as current or non-current as per the Company''s normal
operating cycle and other criteria set out in the Schedule VI of the
Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets, and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of Assets or
Liabilities in the Future periods.
c) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding
CENVAT, VAT and Subsidy), including financing costs till commencement
of commercial production and adjustments arising from exchange rate
variations relating to borrowings attributable to the fixed assets are
capitalized.
d) Depreciation:
The Company has provided depreciation for all the assets using straight
line method at the rates specified in the Schedule XIV of the Companies
Act, 1956.
e) Inventories:
Inventories have been taken as valued and certified by the Management.
The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or net realizable value
whichever is lower.
Finished goods - at cost or net realizable value on FIFO basis
whichever is lower.
f) Retirement benefits:
(i) Company''s contribution to provident fund is charged to Profit &
Loss Account.
(ii) Provision has been made in accounts for the future payment of
gratuity to the employees of the Company, Pursuant to the payment of
Gratuity Act, 1972 however provision has not been made based on the
actuarial valuation.
g) Revenue recognition:
Sale is recognized on dispatch of products and is inclusive of Excise
Duty.
Interest income is recognized on accrual basis.
Dividend income is recognized as and when the right to receive the
amount is established.
h) Investments:
Current Investments are valued at cost or market price whichever is
lower and in the absence of market quotation, cost price is adopted.
Long Term Investments are valued at cost.
i) R&D Expenditure:
Capital expenditure is included in the fixed assets and depreciation as
per Company''s policy. Revenue expenditure is charged to profit & loss
account of the year in which they are incurred is included in the
respective heads of expenditure.
j) Borrowing Costs:
Borrowings costs that are directly attributable to the acquisition of
qualifying assets are capitalized as part of cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
k) Cash Flow Statement:
The Cash Flow Statement has been compiled from and is based on the
Balance Sheet as at 31st March, 2014 and the related Profit and Loss
Account for the year ended on that date. The Cash Flow Statement has
been prepared under the indirect method as set out in the Accounting
Standard - 3 on Cash Flow statement issued by ICAI.
l) Accounting for Taxes on Income:
Current Tax: Provision for Current Income Tax is made on the basis of
the taxable income for the year as determined in accordance with the
provisions of Income Tax Act, 1961.
Deferred Tax: Deferred income tax is recognized, on timing differences,
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. The tax effect is calculated on the accumulated
timing differences at the year end based on tax rates and laws. Enacted
or substantially enacted as of the Balance Sheet date.
m) Employee Stock Option Scheme:
The company has not granted any Employee Stock Option Scheme.
n) Impairment of Assets:
The management assesses using external and internal sources whether
there is any indication that an asset may be impaired. Impairment of an
asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its
eventual disposal. The provision for impairment loss is made when
recoverable amount of the asset is lower than the carrying amount.
o) Government Grants & Other Claims:
Revenue grants including subsidy/rebates, refunds, claims etc., are
credited to profit & loss account under other income or deducted from
the related expenses. Grants related to fixed assets are credited to
capital reserves account or adjusted in the cost of such assets as the
case may be, as and when the ultimate realisability of such grants
etc., are established/ realized.
p) Miscellaneous Expenses:
Miscellaneous expenses and expenditure in connection with Public issue
and issue of shares are being written off over a period of five years.
q) Provisions and Contingent Liabilities and Contingent Assets:
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of obligations and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but if
material, are disclosed in the notes to accounts. Contingent assets are
not recognized or disclosed in the financial statements.
r) Cash and Cash Equivalents:
Cash and cash equivalents comprise of cash at bank and cash in hand.
The Company considers all highly liquid investments with an original
maturity of three months or less from date of purchase, to be cash
equivalents.
s) Leases:
Lease rentals in respect of assets acquired under operating lease are
charged to Statement of Profit and Loss.
t) Intangible Assets:
Intangible assets are stated at acquisition cost, net of accumulated
amortisation and accumulated impairment losses, if any. Intangible
assets are amortised on a as per rates mentioned in the Act.
u) Segment reporting:
The accounting policies adopted for segment reporting are in conformity
with the accounting policies adopted for the company. Further,
(i) Inter segment revenue has been accounted for based on the
transaction price agreed to between segments which is primarily market
based.
(ii) Revenue and expenses have been identified to segments on the basis
of their relationship to the operating activities of the segment.
Revenue and expenses, which relate to the company as a whole and are
not allocable to segments on a reasonable basis, have been included
under "Un-allocated corporate expenses net of un-allocated income".
v) Earnings per share:
Basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the equity shareholders by
the weighted average number of equity shares outstanding during the
period. The number of shares used in computing diluted earnings per
share comprises the weighted average number of shares considered for
deriving basis earning per share and also the weighted average number
of equity shares, which may be issued on the conversion of all dilutive
potential shares, unless the results would be anti dilutive.
w) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. Net exchange gain or loss
resulting in respect of foreign exchange translations settled during
period is recognized in the profit & loss account except for the net
exchange gain or loss on account of imported fixed assets, which is
adjusted in the carrying amount of the related fixed assets. Foreign
currency denominated current assets and current liabilities at the
period end are translated at the period end exchange rates and the
resulting net gain or loss is recognized in the profit & loss account,
except for exchange difference related to fixed assets purchased from
foreign countries is adjusted in the carrying amount of related fixed
assets.
Security Details
Term Loan from Bank is Secured by hypothecation of Fixed Assets and
Personal Guarantee of directors of the company excluding Honarary
directors.The Company availed Rs.62,08,841/- out total Sanction of
Rs.140 lakhs.The Loan is repayble in 80 equated monthly instalments of
Rs 1,75,000/- each, due to short availment of term loan the due date
may be much earlier. The Loan carried intrest @ (BR 4.5%)% p.a.
Vehicle Loan from Bank is secured by hypothecation of vehicle financed.
Mar 31, 2013
(a) Basis of Accounting:
The Company follows the mercantile system of accounting. The accounts
are prepared on historical cost basis and as a going concern.
Accounting policies not specifically referred to otherwise are
consistent with the generally accepted accounting standards referred to
in Section 211(3C) of the Companies Act 1956.
(b) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding
CENVAT, VAT and Subsidy), including financing costs till commencement
of commercial production and adjustments arising from exchange rate
variations relating to borrowings attributable to the fixed assets are
capitalized.
(c) Depreciation:
The Company has provided depreciation for all the assets using straight
line method at the rates specified in the Schedule XIV of the Companies
Act, 1956.
(d) Inventories:
Inventories have been taken as valued and certified by the Management.
The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or market price whichever is
lower. Finished goods - at cost or market value on FIFO basis
whichever is lower.
(e) Retirement benefits:
(i) Company''s contribution to provident fund is charged to Profit &
Loss Account.
(ii) Provision has been made in accounts for the future payment of
gratuity to the employees of the Company, Pursuant to the payment of
Gratuity Act, 1972 however provision has not been made based on the
actuarial valuation.
(f) Revenue recognition:
i) Sale is recognized on dispatch of products and is inclusive of
Excise Duty. Sales Tax and
Packing and forwarding charges. ii) Interest income is recognized on
accrual basis. iii) Dividend income is recognized as and when the
right to receive the amount is established.
(g) Investments
Quoted and un-quoted Investments are valued at cost.
(h) R&D Expenditure
a. Capital expenditure is included in the fixed assets and
depreciation as per Company''s policy.
b. Revenue expenditure is charged to profit & loss account of the year
in which they are incurred is included in the respective heads of
expenditure.
(I) Borrowing Costs
Borrowings costs that are directly attributable to the acquisition of
qualifying assets are capitalized as part of cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
(j) Cash Flow Statement
The Cash Flow Statement has been compiled from and is based on the
Balance Sheet as at 31st March, 2013 and the related Profit and Loss
Account for the year ended on that date. The Cash Flow Statement has
been prepared under the indirect method as set out in the Accounting
Standard - 3 on Cash Flow statement issued by ICAI.
(k) Accounting for Taxes on Income
a. Current Tax: Provision for Current Income Tax is made on the basis
of the taxable income for the year as determined in accordance with the
provisions of Income Tax Act, 1961.
b. Deferred Tax: Deferred income tax is recognized, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. The tax effect is calculated on the
accumulated timing differences at the year end based on tax rates and
laws. Enacted or substantially enacted as of the Balance Sheet date.
(l) Employee Stock Option Scheme
The company has not granted any Employee Stock Option Scheme.
(m) Impairment of Assets
The management assesses using external and internal sources whether
there is any indication that an asset may be impaired. Impairment of an
asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its
eventual disposal. The provision for impairment loss is made when
recoverable amount of the asset is lower than the carrying amount.
(n) Government Grants & Other Claims
Revenue grants including subsidy/rebates, refunds, claims etc., are
credited to profit & loss account under other income or deducted from
the related expenses. Grants related to fixed assets are credited to
capital reserves account or adjusted in the cost of such assets as the
case may be, as and when the ultimate realisability of such grants
etc., are established/realized.
(o) Miscellaneous Expenses:
Preliminary expenses and expenditure in connection with Public issue
and issue of shares are being written off over a period of five years.
(p) Provisions and Contingent Liabilities and Contingent Assets
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of obligations and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but if
material, are disclosed in the notes to accounts. Contingent assets are
not recognized or disclosed in the financial statements.
Mar 31, 2012
(a) Basis of Accounting:
The Company follows the mercantile system of accounting. The accounts
are prepared on historical cost basis and as a going concern.
Accounting policies not specifically referred to otherwise are
consistent with the generally accepted accounting standards referred to
in Section 211(3C) of the Companies Act 1956.
(b) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding
CENVAT, VAT and Subsidy), including financing costs till commencement
of commercial production and adjustments arising from exchange rate
variations relating to borrowings attributable to the fixed assets are
capitalized.
(c) Depreciation:
The Company has provided depreciation for all the assets using straight
line method at the rates specified in the Schedule XIV of the Companies
Act, 1956.
(d) Inventories:
Inventories have been taken as valued and certified by the Management.
The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or market price whichever is
lower.
Finished goods  at lower of cost or market value on FIFO basis.
(e) Retirement benefits:
(i) Company''s contribution to provident fund is charged to Profit &
Loss Account.
(ii) Provision has been made in accounts for the future payment of
gratuity to the employees of the Company, Pursuant to the payment of
Gratuity Act, 1972 however provision has not been made based on the
actuarial valuation.
(f) Revenue recognition:
i) Sale is recognized on dispatch of products and is inclusive of
Excise Duty. Sales Tax and
Packing and forwarding charges. ii) Interest income is recognized on
accrual basis. iii) Dividend income is recognized as and when the
right to receive the amount is established.
(g) Investments
Quoted and un-quoted Investments are valued at cost.
(h) R&D Expenditure
a. Capital expenditure is included in the fixed assets and
depreciation as per Company''s policy.
b. Revenue expenditure is charged to profit & loss account of the year
in which they are incurred is included in the respective heads of
expenditure.
(i) Borrowing Costs
Borrowings costs that are directly attributable to the acquisition of
qualifying assets are capitalized as part of cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
(j) Cash Flow Statement
The Cash Flow Statement has been compiled from and is based on the
Balance Sheet as at 31st March, 2012 and the related Profit and Loss
Account for the year ended on that date. The Cash Flow Statement has
been prepared under the indirect method as set out in the Accounting
Standard - 3 on Cash Flow statement issued by ICAI.
(k) Accounting for Taxes on Income
a. Current Tax: Provision for Current Income Tax is made on the basis
of the taxable income for the year as determined in accordance with the
provisions of Income Tax Act, 1961.
b. Deferred Tax: Deferred income tax is recognized, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. The tax effect is calculated on the
accumulated timing differences at the year end based on tax rates and
laws. Enacted or substantially enacted as of the Balance Sheet date.
(l) Employee Stock Option Scheme
The company has not granted any Employee Stock Option Scheme.
(m) Impairment of Assets
The management assesses using external and internal sources whether
there is any indication that an asset may be impaired. Impairment of an
asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its
eventual disposal. The provision for impairment loss is made when
recoverable amount of the asset is lower than the carrying amount.
(n) Government Grants & Other Claims
Revenue grants including subsidy/rebates, refunds, claims etc., are
credited to profit & loss account under other income or deducted from
the related expenses. Grants related to fixed assets are credited to
capital reserves account or adjusted in the cost of such assets as the
case may be, as and when the ultimate realisability of such grants
etc., are established/realized.
(o) Miscellaneous Expenses:
Preliminary expenses and expenditure in connection with Public issue
and issue of shares are being written off over a period of five years.
(p) Provisions and Contingent Liabilities and Contingent Assets
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of obligations and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but if
material, are disclosed in the notes to accounts. Contingent assets are
not recognized or disclosed in the financial statements.
Mar 31, 2010
(a) Basis of Accounting:
The Company follows the mercantile system of accounting. The accounts
are prepared on historical cost basis and as a going concern.
Accounting policies not specifically referred to otherwise are
consistent with the generally accepted accounting standards referred to
in Section 211 (3C) of the Companies Act 1956.
(b) Fixed Assets:
Fixed assets are stated at cost less depreciation. All costs (excluding
CENVAT, VAT and Subsidy), including financing costs till commencement
of commercial production and adjustments arising from exchange rate
variations relating to borrowings attributable to the fixed assets are
capitalized.
(c) Depreciation:
The Company has provided depreciation for all the assets using straight
line method at the rates specified in the Schedule XIV of the Companies
Act, 1956.
(d) Inventories:
Inventories have been taken as valued and certified by the Management.
The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or market price whichever is
lower.
Finished goods - at lower of cost or market value on FIFO basis.
(e) Retirement benefits:
(i) Companys contribution to provident fund is charged to Profit &
Loss Account.
(ii) No provisions have been made in accounts for the future payment of
gratuity to the employees of the Company, Pursuant to the payment of
Gratuity Act, 1972. The same being accounted as and when it is paid.
(f) Revenue recognition:
i) Sale is recognized on dispatch of products and is inclusive of
Excise Duty. Sales Tax and Packing and forwarding charges.
ii) Interest income is recognized on accrual basis.
iii) Dividend income is recognized as and when the right to receive the
amount is established.
g) Investments
Quoted and un-quoted Investments are valued at cost.
h) R&D Expenditure
a. Capital expenditure is included in the fixed assets and
depreciation as per Companys policy.
b. Revenue expenditure is charged to profit & loss account of the year
in which they are incurred is included in the respective heads of
expenditure.
i) Borrowing Costs
Borrowings costs that are directly attributable to the acquisition of
qualifying assets are capitalized as part of cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
j) Cash Flow Statement
The Cash Flow Statement has been compiled from and is based on the
Balance Sheet as at 31st March, 2010 and the related Profit and Loss
Account for the year ended on that date. The Cash Flow Statement has
been prepared under the indirect method as set out in the Accounting
Standard - 3 on Cash Flow statement issued by ICAI.
k) Accounting for Taxes on Income
a. Current Tax: Provision for Current Income Tax is made on the basis
of the taxable income for the year as determined in accordance with the
provisions of Income Tax Act, 1961.
b. Deferred Tax: Deferred income tax is recognized, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. The tax effect is calculated on the
accumulated timing differences at the year end based on tax rates and
laws. Enacted or substantially enacted as of the Balance Sheet date.
l) Employee Stock Option Scheme
The company has not granted any Employee Stock Option Scheme.
m) Impairment of Assets
The management assesses using external and internal sources whether
there is any indication that an asset may be impaired. Impairment of an
asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its
eventual disposal. The provision for impairment loss is made when
recoverable amount of the asset is lower than the carrying amount.
n) Government Grants & Other Claims
Revenue grants including subsidy/rebates, refunds, claims etc., are
credited to profit & loss account under other income or deducted from
the related expenses. Grants related to fixed assets are credited to
capital reserves account or adjusted in the cost of such assets as the
case may be, as and when the ultimate realisability of such grants
etc., are established/realized.
o) Miscellaneous Expenses:
Preliminary expenses and expenditure in connection with issue of shares
are being written off over a period of five years.
p) Provisions and Contingent Liabilities and Contingent Assets
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of obligations and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but if
material, are disclosed in the notes to accounts. Contingent assets are
not recognized or disclosed in the financial statements.