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Accounting Policies of Syncom Healthcare Ltd. Company

Mar 31, 2015

The accounting policies set out below have been applied consistently to the periods presented in these financial statements.

(i) Basis of Preparation of financial statements

1. The financial statements are prepared in accordance with generally accepted accounting principles in India.The company is following the accrual system of accounting and its accounts are in compliance with the mandatory Accounting Standards specified in 133 of the Companies Act 2013 read with Rule 7 of the Companies (Account) Rules 2014. Accounting Policies have continuously applied except where a newly -issued accounting standard is initially adopted or a revision to existing accounting standard requires a change in the accounting policy, or is otherwise stated hereinafter.

2. There is no change in method of accounting during the year

3. The company has stopped maintaining separate books of accounts for Dehradun Industrial unit w.e.f. 01/ 04/14 on implementation of SAP system by the company, prior to which separate books were maintained for Dehradun industrial Unit.

(ii) Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognised prospectively in the current and future periods.

(iii) Revenue Recognition

i. Revenue from Sales and Job work receipts is recognised on generation of invoices of the goods after completion of packing of goods against confirmed orders though actual dispatch of goods may follow the invoice date.

ii. Dividend income on investment is accounted when the right to receive is established.

iii. All other incomes are accounted on accrual basis.

(iv) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, and taxes but net of CENVAT and inclusive of other incidental expenses of bringing the asset to its working condition for its intended use and interest attributable to construction, production or acquisition of qualifying assets. Subsequent expenditure related to an item of tangible fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Depreciation on fixed assets has been charged on Written Down Value (WDV) basis on pro-rata basis on the basis of remaining useful life prescribed in Schedule II of the Companies Act 2013 amount except to the extent that assets costing up to Rs. 5000/- are not capitalised and fully charged to Profit and loss account in the year of purchase.

The company has revised the estimated useful life of the fixed assets in accordance with the useful life of the assets laid in the schedule - II of the Companies Act 2013 due to which the depreciation charged is higher by Rs. 16384749/- as compared to depreciation calculated according to useful life of assets as per companies Act, 1956 and the Loss of the year 2014-15 is higher to that extent.

(v) Investments

Long term investments are stated at cost less diminution other than temporary diminution in value, if any. Current investments are stated at lower of cost and fair value. An investment in foreign subsidiary is stated at cost by converting at exchange rate prevailing at the time of remittance against such investment.

(vi) Expensing out of Intangible Assets

In accordance with Accounting Standard 26 -"Intangible assets " the useful life of company's patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised/expensed out equally over a period of five years.

Other major Expenses on Product Registration and brand development expenses incurred by the company in the 2013-14 is considered to be one time heavy expenditure the benefit of which is of enduring nature and is expected to be received for next five years. So the company has treated the above as deferred revenue expenditure to be written off equally in five years, with initial year being financial year 2013-14.

(vii) Valuation of Inventories

a) Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost or net realizable value which ever is lower.

b) Closing stock of Gifts item to be used as part of sale promotion is valued at cost.

c) Closing Stock of Work in process is valued at the cost of materials used there in plus conversion cost depending on the stage of completion.

(viii) Borrowing cost:

Borrowing Cost directly attributable to the acquisition or construction of qualifying assets is capitalised as a part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

(ix) Foreign Currency Transactions

(a). Transactions in foreign exchange which are covered by forward contracts are accounted for at the contracted rates, the difference between the contracted rate and the exchange rate on the date of transaction is recognized in Profit & Loss Account. Difference relating to transactions involving more than one financial year are carried over the period of transaction. In respect of forward contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed at the end of the contract. However there were no forward contracts taken by the company during the year. Transactions other than those covered by forward contracts are recognized at the exchange rate prevailing on date of transaction. Gains & losses arising on account of realization are accounted for in Profit & Loss Account.

(b). Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and are not covered by forward contracts are translated at the year end exchange rates.

(x) Impairment of Assets

Fixed assets are reviewed at each reporting date to determine if there is any indication of impairment however no asset whose carrying cost exceeds its recoverable value is held by the company as on 31/03/2015.

(xi) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

(xii) Current Income Tax and Deferred Tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of local Income Tax Laws as applicable to the financial year.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income of the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

(xiii) Employee Benefits

(a). Short Term Employee Benefits:

Liability on account of short term employee benefits is recognised on an undiscounted and accrual basis during the period when the employee renders service/vesting period of the benefit.

(b). Post Employment Benefits:

Post retirement contribution plans such as Provident Fund are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds accrue. Post retirement benefit such as gratuity and leave encashment are determined and provided on the basis of actuarial valuation.

(xiv) Segment Information

The company operates exclusively in the Pharmaceutical formulations business segment and as such there is no reportable segment information as per Accounting Standard 17.

(xv) The Company has also regrouped and re-classified and rearranged the previous year figures in accordance with the requirements applicable in the current year.

(xvi) All the figures have been rounded off to nearest of Rupee.


Mar 31, 2014

The accounting policies set out below have been applied consistently to the periods presented in these financial statements.

(i) Basis of Preparation of financial statements

1. The financial statements are prepared in accordance with generally accepted accounting principles in India. The company is following the accrual system of accounting as per the provisions of sec. 209 (3)(b) of the companies Act, 1956 and its accounts are in compliance with the mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as amended vide Companies (Accounting Standards) Amendment Rules, 2009 except to the extent that the Leave encashment provision is made after deducting 30 days from the leave encashment entitlement of the employees on a cumulative basis for the tenure of the employment. This deduction of 30 days is paid only on retirement and/or termination of employee & is retained by the company if the Employee resigns without requisite notice to the company as per the company's rules. The provision for gratuity has been made only for the employees eligible for gratuity as on 31/03/2014 and not on the basis of actuarial valuation as laid down under AS 15 notified under the said rules.

2. There is no change in method of accounting during the year.

3. The company is maintaining separate books of accounts for a) Dehradun Industrial unit which is treated as a separate division with in the company and b) trading activities which are head quartered at Indore.

(ii) Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognised prospectively in the current and future periods.

(iii) Revenue Recognition

i. Revenue from Sales and Job work receipts is recognised on generation of invoices of the goods after completion of packing of goods against confirmed orders though actual dispatch of goods may follow the invoice date.

ii. Dividend income on investment is accounted when the right to receive is established.

iii. All other incomes are accounted on accrual basis.

(iv) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, and taxes but net of CENVAT and inclusive of other incidental expenses of bringing the asset to its working condition for its intended use and interest attributable to construction, production or acquisition of qualifying assets. Subsequent expenditure related to an item of tangible fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

(v) Depreciation on fixed and movable assets has been charged on Written Down Value (WDV) basis on pro-rata basis on the rates prescribed in Schedule XIV of the Companies Act 1956 except to the extent that assets costing up to Rs. 5000/- are not capitalised and fully charged to Profit and loss account in the year of purchase.

(vi) Investments

Long term investments are stated at cost less diminution other than temporary diminution in value, if any. Current investments are stated at lower of cost and fair value. An investment in foreign subsidiary is stated at cost by converting at exchange rate prevailing at the time of remittance against such investment.

(vii) Expensing out of Intangible Assets

In accordance with Accounting Standard 26 -"Intangible assets " the useful life of company's patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised/expensed out equally over a period of five years.

(viii) Valuation of Inventories

a) Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost or net realizable value which ever is lower.

b) Closing stock of Gifts item to be used as part of sale promotion is valued at cost.

c) Closing Stock of Work in process is valued at the cost of materials used there in plus conversion cost depending on the stage of completion.

(ix) Borrowing cost:

Borrowing Cost directly attributable to the acquisition or construction of qualifying assets is capitalised as a part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred.

(x) Foreign Currency Transactions

(a) . Transactions in foreign exchange which are covered by forward contracts are accounted for at the contracted

rates, the difference between the contracted rate and the exchange rate on the date of transaction is recognized in Profit & Loss Account. Difference relating to transactions involving more than one financial year are carried over the period of transaction. In respect of forward contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed at the end of the contract. However there were no forward contracts taken by the company during the year.

Transactions other than those covered by forward contracts are recognized at the exchange rate prevailing on date of transaction. Gains & losses arising on account of realization are accounted for in statement of Profit & Loss.

(b) . Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and are not covered by

forward contracts are translated at the year end exchange rates.

(xi) Impairment of Assets:

Fixed assets are reviewed at each reporting date to determine if there is any indication of impairment however there is no asset whose carrying cost exceeds its recoverable value is held by the company as on 31/03/2014.

(xii) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

(xiii) Current Income Tax and Deferred Tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of local Income Tax Laws as applicable to the financial year.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income of the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

(xiv) Employee Benefits

(a) Short Term Employee Benefits:

Liability on account of short term employee benefits is recognised on an undiscounted and accrual basis during the period when the employee renders service/vesting period of the benefit.

(b) Post Employment Benefits:

Post retirement contribution plans such as Provident Fund & ESIC are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds accrue. Post retirement benefit plans such as gratuity is provided on the employees which are eligible as on 31/03/2014 for gratuity and leave encashment are determined on the basis of actual leaves outstanding at the year end.

(xv) Segment Information

The company operates exclusively in the Pharmaceutical business segment and as such there is no reportable segment information as per Accounting Standard 17.

(xvi) The Company has also regrouped and re-classified and rearranged the previous year figures in accordance with the requirements applicable in the current year.

(xvii) All the figures have been rounded off of to nearest of Rupee.


Mar 31, 2013

The accounting policies set out below have been applied consistently to the periods presented in these financial statements.

(I) Basis of Preparation of financial statements

1. The financial statements are prepared in accordance with generally accepted accounting principles in India. The company is following the accrual system of accounting as per the provisions of sec. 209 (3)(b) of the companies Act, 1956 and its accounts are in compliance with the mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as amended vide Companies (Accounting Standards) Amendment Rules, 2009 except to the extent that the Leave encashment provision is made after deducting 30 days from the leave encashment entitlement of the employees on a cumulative basis for the tenure of the employment. This deduction of 30 days is paid only on retirement and/or termination of employee & is retained by the company if the Employee resigns without requisite notice to the company as per the company''s rules.

The provision for gratuity has been made only for the employees eligible for gratuity as on 31/03/2013 and not on the basis of actuarial valuation as laid down under AS 15 notified under the said rules.

2. There is no change in method of accounting during the year.

3. The company is maintaining separate books of accounts for a) Dehradun Industrial unit which is treated as a separate division with in the company and b) trading activities which are head quartered at Indore.

4 (ii) Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognised prospectively in the current and future periods.

(iii) Revenue Recognition

I. Revenue from Sales and Job work receipts is recognised on generation of invoices of the goods " * after completion of packing of goods against confirmed orders though actual dispatch of goods may follow the invoice date.

ii. Dividend income on investment is accounted when the right to receive is established.

iii. All other incomes are accounted on accrual basis.

(iv) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, and taxes but net of CENVAT and inclusive of other incidental expenses of bringing the asset to its working condition for its intended use and interest attributable to construction, production or acquisition of qualifying assets. Subsequent expenditure related to an item of tangible fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

(v) Depreciation on fixed and movable assets

Has been charged on Written Down Value (WDV) basis on pro-rata basis on the rates prescribed in Schedule XIV of the Companies Act 1956 except to the extent that assets costing up to Rs. 5000/- are not capitalised and fully charged to Profit and loss account in the year of purchase.

(vi) Investments

Long term investments are stated at cost less diminution other than temporary diminution in value, if any. Current investments are stated at lower of cost and fair value. An investment in foreign subsidiary is stated at cost by converting at exchange rate prevailing at the time of remittance against such investment.

(vii) Expensing out of Intangible Assets

In accordance with Accounting Standard 26 -"Intangible assets" the useful life of company''s patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised/expensed out equally over a period of five years.

(viii) Valuation of Inventories

a) Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost or net realizable value which ever is lower.

b) Closing stock of Gifts item to be used as part of sale promotion is valued at cost.

c) Closing Stock of Work in process is valued at the cost of materials used there in plus conversion cost depending on the stage of completion.

(ix) Borrowing cost:

Borrowing Cost directly attributable to the acquisition or construction of qualifying assets is capitalised as a part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

(x) Foreign Currency Transactions

(a) Transactions in foreign exchange which are covered by forward contracts are accounted for at the

contracted rates, the difference between the contracted rate and the exchange rate on the date of transaction is recognized in Profit & Loss Account. Difference relating to transactions involving more than one financial year are carried over the period of transaction. In respect of forward contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed at the end of the contract. However there were no forward contracts taken by the company during the year.

Transactions other than those covered by forward contracts are recognized at the exchange rate prevailing on date of transaction. Gains & losses arising on account of realization are accounted for in Profit & Loss Account.

(b) Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and are not covered by forward contracts are translated at the year end exchange rates.

(xi) Impairment of Assets:

Fixed assets are reviewed at each reporting date to determine if there is any indication of impairment however there is no asset whose carrying cost exceeds its recoverable value is held by the company as on 31/03/2013.

(xii) Provisions. Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

(xiii) Current Income Tax and Deferred Tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of iocal Income Tax Laws as applicable to the financial year.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income of the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

(xiv) Employee Benefits

(a) Short Term Employee Benefits:

Liability on account of short term employee benefits is recognised on an undiscounted and accrual basis during the period when the employee renders service/vesting period of the benefit.

(b) Post Employment Benefits:

Post retirement contribution plans such as Provident Fund & ESIC are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds accrue. Post retirement benefit plans such as gratuity is provided on the employees which are eligible as on 31/03/2013 for gratuity and leave encashment are determined on the basis of actual leaves outstanding at the year end.

(xv) Segment Information

The company operates exclusively in the Pharmaceutical business segment and as such there is no k reportable segment information as per Accounting Standard 17.

(xvi) The Company has also regrouped and re-classified and rearranged the previous year figures in accordance with the requirements applicable in the current year.

(xvii) All the figures have been rounded off of to nearest of Rupee.


Mar 31, 2012

(i) System of accounting.

1. The company is following the accrual system of accounting as per the provisions of sec. 209 (3)(b) of the companies Act, 1956 and its accounts are in compliance with the mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as amended vide Companies (Accounting Standards) Amendment Rules, 2009 except to the extent that the provision for gratuity has been made only for the employees eligible for gratuity as on 31/03/2012 and noton the basis of actuarial valuation as laid down under AS 15 notified under the said rules.

2. There is no change in method of accounting during the year.

3. The company is maintaining separate books of accounts for a) Defraud Industrial unit which is treated as a separate division with in the company and b) trading activities which are head quartered at Indore.

(ii) REVENUE RECOGNITION:

All revenues and expenses are accounted for on accrual basis except to the extent stated otherwise.

(iii) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, taxes but net of CENVAT and inclusive of other incidental expenses and interest attributable to construction, production or acquisition of qualifying assets.

(iv) Depreciation on fixed and movable assets has been charged on WDV basis on pro-rata basis on the rates prescribed in Schedule XIV of the Companies Act 1956. Assets costing up to Rs.5000/- are fully depreciated in the yearof purchase.

(v) Investments:

Long term investments are stated at cost less diminution other than temporary diminution in value, if any. Current investments are stated at lower of cost and fair value.

(vi) Expensing out of Intangible Assets

In accordance with Accounting Standard 26 -"Intangible assets " the useful life of company's patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised/expensed out equally over a period of five years.

(vii) Inventory Valuation

a) Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost or net realizable value which ever is lower.

b) Closing stock of Gifts item to be used as part of sale promotion expenses is valued at cost.

c) Closing Stock of Work in process is valued at the cost of materials used there in plus conversion costde pending on the stage of completion.

(viii) Borrowing cost:

Borrowing Costs directly attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost ofthe assets, up to the date the assets are put to use. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

(ix) Preliminary expenses

Opening balance of Preliminary expenses has been fully amortized in the current year as against miscellaneous expenditure being amortized over a period of five years upto previous year. Consequently the profit of the financial Year 2011-12 is lower by Rs. 209433/- due to the change in accounting policy in this regard.

(x) Foreign Currency Transactions

a. Transactions in foreign exchange which are covered by forward contracts are accounted for at the contracted rates, the difference between the contracted rate and the exchange rate on the date of transaction is recognized in Profit & Loss Account. Difference relating to transactions involving more than one financial year are carried over the period of transaction. In respect of forward contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed at the end of the contract. However there were no forward contracts taken by the company during the previous year.

Transactions other than those covered by forward contracts are recognized at the exchange rate prevailing on date of transaction. Gains & losses arising on account of realization are accounted for in Profit & Loss Account.

b. Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and are not covered by forward contracts are translated at the year end exchange rates.


Mar 31, 2011

(i) System of accounting.

1. The company is following the accrual system of accounting as per the provisions of sec. 209 (3)(b) of the companies Act, 1956 and its accounts are in compliance with the mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as amended vide Companies (Accounting Standards) Amendment Rules, 2009 except to the extent that the provision for gratuity has been made only for the employees eligible for gratuity as on 31/03/2011 and not on the basis of actuarial valuation as laid down under AS 15 notified under the said rules.

2. There is no change in method of accounting during the year.

3. The company is maintaining separate books of accounts for a) Dehradun Industrial unit which is treated as a separate division with in the company and b) trading activities which are head quartered at Indore.

(ii) REVENUE RECOGNITION:

All revenues and expenses are accounted for on accrual basis except to the extent stated otherwise.

(iii) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, taxes but net of CENVAT and inclusive of other incidental expenses and interest attributable to construction, production or acquisition of qualifying assets.

(iv) Depreciation on fixed and movable assets has been charged on WDV basis on pro-rata basis on the rates prescribed in Schedule XIV of the Companies Act 1956. Assets costing up to Rs.5000/- are fully depreciated in the year of purchase.

(v) Investments:

Long term investments are stated at cost less diminution other than temporary diminution in value, if any. Current investments are stated at lower of cost and fair value.

(vi) Expensing out of Intangible Assets

In accordance with Accounting Standard 26 –"Intangible assets " the useful life of company''s patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised/expensed out equally over a period of five years.

(vii) Inventory Valuation

a) Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost or net realizable value which ever is lower.

b) Closing stock of Gifts item to be used as part of sale promotion expenses is valued at cost.

c) Closing Stock of Work in process is valued at the cost of materials used there in plus conversion cost depending on the stage of completion.

(viii) Borrowing cost:

Borrowing Costs directly attributable to the acquisition or construction of qualifying assets are capitalised as a part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

(ix) Preliminary expenses

Preliminary expenses upto 31/03/2009 are shown as miscellaneous expenditure in the balance sheet. Expenditure incurred for increase in authorised capital has also been included in this head as and when the same are incurred. The same are being amortised over a period of five years.

The Expenses incurred after 31/03/2009 are written off in the year of incurrence itself. In case the expenses are incurred for issue of shares at premium the expenses are written off against the security premium received from the issue proceeds.

(x) Foreign Currency Transactions

a. Transactions in foreign exchange which are covered by forward contracts are accounted for at the contracted rates, the difference between the contracted rate and the exchange rate on the date of transaction is recognized in Profit & Loss Account. Difference relating to transactions involving more than one financial year are carried over the period of transaction. In respect of forward contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed at the end of the contract. However there were no forward contracts taken by the company during the previous year.

Transactions other than those covered by forward contracts are recognized at the exchange rate prevailing on date of transaction. Gains & losses arising on account of realization are accounted for in Profit & Loss Account.

b. Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and are not covered by forward contracts are translated at the year end exchange rates.

(XI) Impairment of Assets:

No asset whose carrying cost exceeds its recoverable value is held by the company as on 31/03/2011

(xii) The cash subsidy received in the year 2007-08 and 2008-09 from the government for set up of the Dehradun Industrial unit of the company has been disclosed as Capital reserve in the balance sheet.














Mar 31, 2009

(i) System of accounting.

1. The company is following the accrual system of accounting as per the provisions of sec. 209 (3)(b) of the companies Act, 1956 and its accounts are in compliance with the mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as amended vide Companies (Accounting Standards) Amendment Rules, 2009 except to the extent that the gratuity provision has been made only for the employees eligible for gratuity as on 31.03.2009 and not on actuarial valuation basis as laid down under AS 15 notified under the said Rules.

2. There is change in method of accounting during the year to the extent that the gratuity and leave encashment has been accounted for on accrual basis from this year vis-a-vis being accounted for on cash basis up to the year 2007-08. As a consequence the profit of the Company is lower by Rs. 10,07,787.00 due to the stated change in the accounting practice.

3. The Company is maintaining separate books of accounts for a) Dehradun Industrial Unit which is treated as a separate division within the Company and b) Trading activities which are headquartered at Indore.

(ii) Fixed Assets

Fixed assets are stated at cost of acquisition/construction.

Cost of acquisition is inclusive of freight, duties, taxes but net of CENVAT and inclusive of other incidental expenses and interest on loans taken for acquisition of assets upto the date of commissioning of assets.

(iii) Depreciation on fixed and movable assets has been charged on WDV basis on pro-rata basis on the rates prescribed in Schedule XIV of the Companies Act 1956. Assets costing upto Rs.5000/- are fully depreciated in the year of purchase.

(iv) Investments:

Outstanding Investments (Rs. 37418/- as on 31/03/09) are long term and stated at cost, net of provision for diminution other than temporary diminution

(v) Deferred Revenue Expenditure:

Deferred Revenue Expenditure represents amount spent during the year 2004-05 and 2005-06, on Repair and Renovation (both interior and exterior) & interior designing and fitting of office and godown Premises, both being in a single building structure, taken on rent during the year 2004-05. The lease arrangement is, for tenure of five years, with the first option to the company for purchase, of the building premises at the end of the lease period. Consequently the said expenditure which is going to benefit the company for at least 5 years (being the tenure of the lease arrangement) from and onwards 2004-05 has been classified as Deferred Revenue Expenditure.

Consequently expenditure incurred during the year 2004-05 was amortised equally over the period of 5 years and the expenditure incurred during the year 2005-06 has been amortised over the period of four years being the unexpired period of tenure of the rental arrangement as on 1/4/2005. Accordingly an amount of Rs. 1550261.75 (previous year Rs. 1550261.75/-) is written off during the year.

(vi) Expensing out of intangible Assets

In accordance with Accounting Standard 26 -"Intangible assets " the useful life of companys patents , trademarks and designs have been amortised over a period of 10 years. Cost of computer software is amortised /expensed out equally over a period of five years.

(vii) Inventory Valuation

Closing stocks of finished goods is valued at cost or net realizable value which ever is lower. Closing Stock of Raw Materials, Packing Materials is valued at the weighted average cost

Closing stock of Gifts item to be used as part of sale promotion expenses is valued at cost.

Closing Stock of Work in process is valued at the cost of materials used there in plus conversion cost depending on the stage of completion.

(viii) Borrowing cost:

Borrowing Costs directly attributable to the acquisition or construction of fixed assets are capitalised as a part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

(ix) Preliminary expenses

Preliminary expenses are shown as miscellaneous expenditure in the balance sheet. Expenditure incurred for increase in authorised capital has also been included in this head as and when the same are incurred. The same are being amortised over a period of five years.

(x) Other Preoperative Expenses

Other Preoperative Expenses of Rs. 3609240/- represent the expenses incurred by the company in respect of proposed initial public offer for equity shares of the company. The same shall be written off in five years after completion of the proposed Public Issue activity.

(xi) Impairment of Assets:

No asset whose carrying cost exceeds its recoverable value is held by the company as on 31.03.2009.

(xii) The cash subsidy received in the year 2007-08 and 2008-09 from the government for set up of the Dehradun Industrial unit of the company has been disclosed as Capital reserve in the balance sheet.

 
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