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Accounting Policies of Sharon Bio-Medicine Ltd. Company

Jun 30, 2015

1. Basis for Preparation of Financial Statements :

The financial statements of the company have been prepared in accordance with generally accepted accounting Principles in India (Indian GAAP) to comply with accounting standards notified under section 211 (3C) of the companies act, 1956 (which continues to be applicable in respect of section 133 of new companies act, 2013 in term of general circular 15/2013 dated September, 13,2013 of the ministry of corporate affairs) and the relevant provisions of Companies Act, 1956 and 2013 Act, as applicable. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting

2. Revenue Recognition:

Sales of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Exports sales are recognized on the basis of Shipping/Airway Bills. Sales stated are excluding sales tax and net of returns.

3. Use of Estimates:

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

4. Fixed Assets :

a) Tangible Fixed Assets are stated at their historical cost, adjusted by revaluation of certain land & building less provision for impairment losses, if any, depreciation, amortization and adjustments on account of foreign exchange fluctuations in respect of changes in rupee liability of foreign currency loans used for acquisition of fixed assets.

b) Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of intangible asset comprises its purchase price including import duties and other taxes, other attributable direct expenses making the asset ready for its intended use.

c) Borrowing cost eligible for Capitalization, incurred in respect of acquisition/construction of a qualifying assets, till the asset is substantially ready for use, are capitalized as part of the cost of that assets.

d) Pre operative, Trial run and incidental expenses relating to the projects are carried forward to be capitalized and apportioned to various assets on commissioning of the Project.

5. Depreciation:

Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased/sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the other fixed assets as follows:

Buildings 22-25 years Electrical Fittings 10 years

Plant & Machinery 20 years Computer Equipment 6 years

Office Equipment 5 years Furniture & Fixtures 10 years

Lab Equipment 10 years Vehicles 8 years

6. Inventories:

Items of inventories are valued on the basis given below:

Raw Materials and Packing Materials: at Cost net of CENVAT/VAT computed on first-in - first out method. Bulk Drugs produced for captive consumption are valued at cost.

Work in process and Finished Goods: at Cost including material cost net of CENVAT, labour cost and all overheads other than selling and distribution overheads for work-in- process and the same or realizable value, whichever is lower in case of finish goods except physician samples which are valued at cost as computed above.

Stores and Spares: Stores and spares parts are valued at purchase cost.

7. Foreign currency transaction:

Foreign currency assets and liabilities are translated at exchange rate prevailing on the last working day of accounting year. Gain or loss on the restatement of foreign currency transaction or on cancellation of forward contract, if any, is reflected in the Profit and Loss account except gain or loss relating to acquisition of fixed assets which is adjusted to the carrying cost of fixed assets.

Transaction in Foreign Currency is recorded in the Books of Account in Indian Rupee at the rate of exchange prevailing on the date of transaction.

8. Investments:

Long Term Investments are Valued at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management,.

9. Miscellaneous Expenditure:

Preliminary Expenses & Public Issue Expenses are amortized in five equal yearly Installments

10. Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of times to get ready for it's intend use. All other borrowing costs are charged to revenue.

11. Earnings per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earnings per share is computed by dividing the net profit or Loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

12. Taxation :

Current Tax: Current Tax is calculated as per the provisions of the Income Tax Act, 1961

Deferred Tax: Deferred tax is recognized on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are subject to the consideration of prudence are recognized and carried forward only to the extent that there is reasonably certainly that sufficient taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and law enacted or substantially enacted on balance sheet date.

13. Provisions and Contingent Liabilities:

Provisions are recognized for present obligations, of uncertain timing or amount, arising as a result of past event where reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations. Where it is not probable that an outflow of resources embodying economic benefit will be required or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow of resources embodying economic benefit is remote.

Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, are so also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefit is remote.

14. Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

i. Long-term Employee Benefits

- Retirement Benefits in the form of provident fund is a defined contribution scheme and contributions are charged to the Profit and Loss account for the year/period when the contributions are due.

- Gratuity being a defined benefit obligation is invested with Gratuity Fund.

- Leave Encashment is recognized on the basis of payment basis at the end of the year.

ii. Employees Stock Option Scheme

The company has granted options to selected Employees including Directors under Sharon ESOS 2010. This options have been granted at Market Prevailing Rate at the time of Grant.

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed by Guidance Note on 'Accounting for Employee Share-based payments' issued by ICAI read with SEBI (Share Based Employee Benefits) Regulations, 2014 issued by SEBI. The excess of market value, if any, of the stock options as on the date of grant over the exercise price of the options is recognized as deferred employee compensation and is charged to the profit and loss account on vesting basis over the vesting period of the options. The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option Outstanding, which is shown under Reserves and Surplus.

15. CENVAT and Service Tax Credit:

CENVAT and Service Tax credit utilized during the year is accounted in excise duty and unutilized CENVAT/Service Tax balance at the year end is considered as advance excise duty.


Jun 30, 2014

1. Basis for Preparation of Financial Statements :

The financial statements of the company have been prepared in accordance with generally accepted accounting Principles in India (Indian GAAP) to comply with accounting standards notified under section 211 (3C) of the companies act, 1956 (which continues to be applicable in respect of section 133 of new companies act, 2013 in term of general circular 15/2013 dated September, 13, 2013 of the ministry of corporate affairs) and the relevant provisions of companies Act 1956 and 2013 Act, as applicable. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting.

2. Revenue Recognition :

Sales of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Exports sales are recognized on the basis of Shipping/Airway Bills. Sales stated are excluding sales tax and net of returns.

3. Use of Estimates :

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

4. Fixed Assets :

a) Tangible Fixed Assets are stated at their historical cost, adjusted by revaluation of certain land & building less provision for impairment losses, if any, depreciation, amortization and adjustments on account of foreign exchange fluctuations in respect of changes in rupee liability of foreign currency loans used for acquisition of fixed assets.

b) Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of intangible asset comprises its purchase price including import duties and other taxes, other attributable direct expenses making the asset ready for its intended use.

c) Borrowing cost eligible for Capitalization, incurred in respect of acquisition/construction of a qualifying assets, till the asset is substantially ready for use, are capitalized as part of the cost of that assets.

d) Pre operative, Trial run and incidental expenses relating to the projects are carried forward to be capitalized and apportioned to various assets on commissioning of the Project

5. Depreciation :

Depreciation on fixed assets is provided using the straight line method and as per rates provided in the schedule XIV of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on a pro- rata basis for assets purchased/sold during the year.

6. Inventories :

Items of inventories are valued on the basis given below:

Raw Materials and Packing Materials: at Cost net of CENVAT/VAT computed on first-in - first out method. Bulk Drugs produced for captive consumption are valued at cost.

Work in process and Finished Goods: at Cost including material cost net of CENVAT, labour cost and all overheads other than selling and distribution overheads for work-in- process and the same or realizable value, whichever is lower in case of finish goods except physician samples which are valued at cost as computed above.

7. Foreign currency transaction :

Foreign currency assets and liabilities are translated at exchange rate prevailing on the last working day of accounting year. Gain or loss on the restatement of foreign currency transaction or on cancellation of forward contract, if any, is reflected in the Profit and Loss account except gain or loss relating to acquisition of fixed assets which is adjusted to the carrying cost of fixed assets.

Transaction in Foreign Currency is recorded in the Books of Account in Indian Rupee at the rate of exchange prevailing on the date of transaction.

8. Investments :

Long Term Investments are Valued at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management,.

9. Miscellaneous Expenditure :

Preliminary Expenses & Public Issue Expenses are amortized in five equal yearly Installments

10. Borrowing Cost :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of times to get ready for it''s intend use. All other borrowing costs are charged to revenue.

11. Earning per Share :

The Company reports basic and diluted earning per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earning per share is computed by dividing the net profit or Loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

12. Taxation :

Current Tax: Current Tax is calculated as per the provisions of the Income Tax Act, 1961

Deferred Tax: Deferred tax is recognized on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are subject to the consideration of prudence are recognized and carried forward only to the extent that there is reasonably certainly that sufficient taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and law enacted or substantially enacted on balance sheet date.

13. Provisions and Contingent Liabilities :

Provisions are recognized for present obligations, of uncertain timing or amount, arising as a result of past event where reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations. Where it is not probable that an outflow of resources embodying economic benefit will be required or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow of resources embodying economic benefit is remote.

Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, are so also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefit is remote.

14. Employee Benefits :

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

i. Long Term Employee Benefits

- Retirement Benefits in the form of provident fund is a defined contribution scheme and contributions are charged to the Profit and Loss account for the year/period when the contributions are due.

- Gratuity being a defined benefit obligation is invested with Gratuity Fund.

- Leave Encashment is recognized on the basis of payment basis at the end of the year.

ii. Employees Stock Option Scheme

The company has granted options to selected Employees including Directors under Sharon ESOS 2010. This options have been granted at Market Prevailing Rate at the time of Grant.

15. CENVAT and Service Tax Credit :

CENVAT and Service Tax credit utilized during the year is accounted in excise duty and unutilized CENVAT/Service Tax balance at the year end is considered as advance excise duty.

16. FIRE LOSS ; Abnormal & Unavoidable in Nature :

During the month of June, 2014 fire occurred at one of our old API''s Plant at W-34 & W-34/1, MIDC, Taloja, Dist.-Raigad, Maharashtra. However, during the fire no human loss has been resulted. However, the loss of Rs. 22,15,65,820/- (Rupees Twenty Two Crores Fifteen Lacs Sixty Five Thousand Eight Hundred Twenty) has been reported on account of stock lying at the plant area along with the capital loss of Rs. 14,58,69,468/- (Rupees Fourteen Crores Fifty Eight Lacs Sixty Nine Thousand Four Hundred Sixty Eight) of Plant & Machinery on Written Down Value basis.

Your directors had opted for the replacement insurance policy instead of normal insurance policy on capital goods. Thereby, you will be pleased to know that your company will be receiving the current replacement value of plant & machinery that has been lost due to fire and not the Written Down Value of Plant & Machinery lost in fire. Keeping uncertainty on mind your company have taken the loss of profit policy, in case the profit of company is hampered in any form. Your company has put up the total claim of approx Rs. 40,00,00,000 (Rupees Forty Crores) including the loss of factory building and some furniture & fixtures.

Further, it would be worth noting that because the fire had occurred in the last month of the financial year 2014, therefore, there was negligible operational loss of production and sales pertaining to the reporting period ending as on 30th June, 2014. To refrain the impact of production & sales loss that would have had surely been casted on the future months on production & sales, the management of your company took the immediate corrective steps by making the tie-ups with some of the job work at some other factory sites so as to carter the production & marketing demand.


Jun 30, 2013

1. Basis for Preparation of Financial Statements :

The Financial statements have been prepared under the historical cost convention, on an accrual basis of accounting, to comply in all the material respects with the notified accounting standards by the Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act,1956. The Accounting principles discussed more fully below are consistent with those used in the previous year.

2. Revenue Recognition:

Sales of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Exports sale are recognized on the basis of Bill of Lading/Airway Bills. Sales stated are excluding sales tax and net of returns. Revenue of Consulting Income has been accounted on accrual basis.

3. Use of Estimates:

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

4. Fixed Assets :

a) Fixed Assets are stated at their original cost, adjusted by revaluation of certain land & building less provision for impairment losses, if any, depreciation, amortization and adjustments on account of foreign exchange fluctuations in respect of changes in rupee liability of foreign currency loans used for acquisition of fixed assets

b) Borrowing cost eligible for Capitalization, incurred in respect of acquisition/construction of a qualifying assets, till the asset is substantially ready for use, are capitalized as part of the cost of that assets.

c) Pre operative. Trail run and incidental expenses relating to the projects are carried forward to be capitalized and apportioned to various assets on commissioning of the Project.

5. Depreciation:

Depreciation on fixed assets is provided using the straight line method and as per rate provided in the XIV schedule of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on a pro- rata basis for assets purchased/sold during the year.

6. Inventories:

Items of inventories are valued on the basis given below:

Raw Materials and Packing Materials: at Cost net of CENVAT/VAT computed on first-in -first method. Bulk Drugs produced for captive consumption are valued at cost.

Work in process and Finished Goods: at Cost including material cost net of CENVAT, labour cost and all overheads other than selling and distribution overheads for work-in- process and the same or realizable value, whichever is lower in case of finish goods except physician samples which are valued at cost as computed above.

Stores and Spares: Stores and spares parts are valued at purchase cost.

7. Foreign currency transaction:

Foreign currency assets and liabilities are translated at exchange rate prevailing on the last working day of accounting year. Gain or loss on the restatement of foreign currency transaction or on cancellation of forward contract if any is reflected in the Profit and Loss account except gain or loss relating to acquisition of fixed assets which is adjusted to the carrying cost of fixed assets.

Transaction in Foreign Currency is recorded in the Books of Account in Indian Rupee at the rate of exchange prevailing on the date of transaction.

8. Investments:

Long Term Investments are Valued at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management,.

9. Miscellaneous Expenditure:

Preliminary Expenses & Public Issue Expenses are amortized in five equal yearly Installments

10. Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of times to get ready for it''s intend use. All other borrowing costs are charged to revenue.

11. Earning per Share:

The Company reports basic and diluted earning per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earning per share is computed by dividing the net profit or Loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

12. Taxation :

Current Tax: Current Tax is calculated as perthe provisions of the IncomeTax Act, 1961

Deferred Tax: Deferred tax is recognized on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are subject to the consideration of prudence are recognized and carried forward only to the extent that there is reasonably certainly that sufficient taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and law enacted or substantially enacted on balance sheet date.

13. Provisions and Contingent Liabilities:

Provisions are recognized for present obligations, of uncertain timing or amount, arising as a result of past event where reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations. Where it is not probable that an outflow of resources embodying economic benefit will be required or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow of resources embodying economic benefit is remote.

Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, are so also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefit is remote.

14. Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service. i. Long Term Employee Benefits

- Retirement Benefits in the form of provident fund is a defined contribution scheme and contributions are charged to the Profit and Loss account for the year/period when the contributions are due.

- Gratuity being a defined benefit obligation is provided on the basis payment basis.

- Leave Encashment is recognized on the basis of payment basis at the end of the year.

ii. Employees Stock Option Scheme

The company has granted options to selected Employees including Directors under Sharon ESOS 2010. This options have been granted at Market Prevailing Rate at the time of Grant.

15. CENVAT and Service Tax Credit:

CENVAT and Service Tax credit utilized during the year is accounted in excise duty and unutilized CENVAT/Service Tax balance at the year end is considered as advance excise duty.


Jun 30, 2010

1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention, on an accrual basis of accounting, to comply in all the material respects with the notified accounting standards by the Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act,1956. The Accounting principles discussed more fully below are consistent with those used in the previous year.

2. REVENUE RECOGNITION:

Sales of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Exports sale are recognized on the basis of Shipping/ Airway Bills. Sales stated are excluding sales tax and net of returns.

3. USE OF ESTIMATES:

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

4. FIXED ASSETS:

a) Fixed Assets are stated at their historical cost, adjusted by revaluation of certain land & building less provision for impairment losses, if any, depreciation, amortization and adjustments on account of foreign exchange fluctuations in respect of changes in rupee liability of foreign currency loans used for acquisition of fixed assets

b) Borrowing cost eligible for Capitalization, incurred in respect of acquisition/construction of a qualifying assets, till the asset is substantially ready for use, are capitalized as part of the cost of that assets.

c) Pre operative, Trial run and incidental expenses relating to the projects are carried forward to be capitalized and apportioned to various assets on commissioning of the Project.

5. DEPRECIATION:

Depreciation on fixed assets is provided using the straight line method and as per rate provided in the XIV schedule of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.

6. INVENTORIES:

Items of inventories are valued on the basis given below:

Raw Materials and Packing Materials: at Cost net of CENVAT/VAT computed on first-in -first out method. Bulk Drugs produced for captive consumption are valued at cost.

Work in process and Finished Goods: at Cost including material cost net of CENV AT, labour cost and all overheads other than selling and distribution overheads for work-in- process and the same or realizable value, whichever is lower in case of finish goods except physician samples which are valued at cost as computed above.

Stores and Spares: Stores and spares parts are valued at purchase cost.

7. FOREIGN CURRENCY TRANSACTION:

Foreign currency assets and liabilities are translated at exchange rate prevailing on the last working day of accounting year. Gain or loss on the restatement of foreign currency transaction or on cancellation of forward contract if any is reflected in the Profit and Loss account except gain or loss relating to acquisition of fixed assets which is adjusted to the carrying cost of fixed assets.

Transaction in Foreign Currency is recorded in the Books of Account in Indian Rupee at the rate of exchange prevailing on the date of transaction.

8. INVESTMENTS:

Long Term Investments are Valued at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management.

9. BORROWING COST:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of times to get ready for its intend use. All other borrowing costs are charged to revenue.

10. EARNING PER SHARE:

The Company reports basic and diluted earning per share in accordance with Accounting Standard 20 on Earnings per Share. Basic earning per share is computed by dividing the net profit or Loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive. This includes employee stock options granted and outstanding

11. TAXATION:

Current Tax: Current Tax is calculated as per the provisions of the Income Tax Act, 1961

Deferred Tax: Deferred tax is recognized on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are subject to the consideration of prudence are recognized and carried forward only to the extent that there is reasonably certainly that sufficient taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end based on the tax rates and law enacted or substantially enacted on balance sheet date.

Fringe Benefit Tax: Fringe Benefit Tax (FBT) payable under the provisions of section 115WC of the Income tax Act, 1961 is in accordance with the Guidance note on Accounting for fringe Benefits Tax issued by the ICAI regarded as an additional income tax and considered in determination of the profits/(losses) for the year.

MAT Credit: MAT Credit entitlement is recognized only when the company actually avails MAT credit based on its annual tax computation.

12. PROVISIONS AND CONTINGENT LIABILITIES:

Provisions are recognized for present obligations, of uncertain timing or amount, arising as a result of past event where reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations. Where it is not probable that an outflow of resources embodying economic benefit will be required or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow of resources embodying economic benefit is remote.

Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, are so also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefit is remote.

13. EMPLOYEE BENEFITS

a. Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

b. Long Term Employee Benefits

- Retirement Benefits in the for of provident fund is a defined contribution scheme and contributions are charged to the Profit and Loss account for the year/period when the contributions are due.

- Gratuity being a defined benefit obligation is provided on the basis of payment.

- Leave Encashment is recognized on the basis of payment at the end of the year.

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

14. CENVAT and Service Tax Credit

CENVAT and Service Tax credit utilized during the year is accounted in excise duty and unutilized CENVAT/ Service Tax balance at the year end is considered as advance excise duty.


Jun 30, 2004

1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

Financial statements are prepared under the historical cost convention on accrual basis in accordance with Accounting Standard applicable in India.

2. REVENUE RECOGNITION:

Items of Income and Expenditure are recognized on accrual basis.

3. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition minus the accumulated depreciation.

4 DEPRECIATION:

Depreciation on fixed assets is provided using the straight line method and as per rate provided in the XIV schedule of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.

5 INVENTORIES:

Inventories are valued at the lower of cost or the net realizable value. Scraps are valued at its net realisable value.

6 RESEARCH AND DEVELOPMENT:

The expenditure incurred on Research and Development will be amortize for a period of five year in equal installment.

7 FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are Accounted at Exchange rate prevailing on the date of the transaction.

8. INVESTMENTS:

Long Term Investments are Valued at cost.

9. Preliminary Expenses & Public Issue Expenses are amortised in ten equal yearly installments


Jun 30, 2003

1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

Financial statements are prepared under the historical cost convention on accrual basis in accordance with Accounting Standard applicable in India.

2. REVENUE RECOGNITION:

Items of Income and Expenditure are recognized on accrual basis.

3. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition minus the accumulated depreciation.

4. CAPITAL WORK IN PROGRESS:

Advances paid towards Building of office premises and Plant and Machineries which have not been installed or put to use, and the cost of assets not put to use, before the year end, are disclosed under Capital Work in Progress.

5. DEPRECIATION:

Depreciation on fixed assets is provided using the straight line method and as per rate provided in the XIV schedule of the Companies Act, 1956, based on the useful life as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.

6. INVENTORIES:

Inventories are valued at the lower of cost or the net realizable value. Scraps are valued at its net realisable value.

7. RESEARCH AND DEVELOPMENT:

The expenditure incurred during the year on Research and Development will be amortize for a period of five year in equal installment.

8. FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are Accounted at Exchange rate prevailing on the date of the transaction.

9. INVESTMENTS:

Long Term Investments are Valued at cost.

10. Preliminary Expenses & Public Issue Expenses are amortised in ten equal yearly installments NOTES TO ACCOUNTS :

11. The amount of sundry creditors outstanding relating to SSI Units as on 30/06/2003 prior to 30 days and above Rs. 1.00 Lac is Rs.25.44 Lacs.


Jun 30, 2002

1. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS :

Financial statements are prepared under the historical cost convention on accrual basis in accordance with Accounting Standard applicable in India.

2. REVENUE RECOGNITION:

Items of Income and Expenditure are recognized on accrual basis.

3. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition minus the accumulated depreciation.

4. CAPITAL WORK IN PROGRESS :

Advances paid towards acquisition of office premises and Plant and Machineries which have not been installed or put to use, and the cost of assets not put to use, before the year end, are disclosed under Capital Work in Progress.

5. DEPRECIATION:

Depreciation on fixed assets is provided using the straight line method and as per rate provided in the XIV schedule of the Companies Act, 1956,based on the useful life as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.

6. INVENTORIES:

Inventories are valued at the lower of cost or the net realizable value. Scraps are valued at its net realisable value.

7. RESEARCH AND DEVELOPMENT:

The expenditure incurred during the year on Research and Development will be amortize for a period of five year in equal installment.

8. FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are Accounted at Exchange rate prevailing on the date of the transaction.

 
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