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Accounting Policies of Tyche Industries Ltd. Company

Mar 31, 2015

A. Basis of Preparation of Financial Statements

The Company follows the mercantile system of Accounting and recognises Income & Expenditure on accrual basis. The accounts are prepared on historical cost basis and as a 'Going Concern'. These Financial Statements are prepared to comply with the General Accepted Accounting Principles in India (Indian GAAP), including the accounting standards specified under Section 133 of the Companies Act 2013 read with rule 7 of Companies (Accounts) Rules, 2014.

Accounting policies not referred to herein otherwise are consistent with Generally Accepted Accounting Principles in India.

B. Fixed assets and depreciation

Fixed assets are carried at the cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Depreciation on fixed assets is provided based on useful lives of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed.

C. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

D. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognized on dispatch (in respect of exports on the date of the bill of lading or airway bill) which coincides with transfer of significant risks and rewards to customer and is inclusive of excise duty and net of trade discounts, sales returns and sales tax, where applicable.Income from job work services are recognized when services are rendered or related costs are incurred in accordance with the terms of specific contracts. Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

E. Investments:

Investments are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long-term investment. Current investments are carried at the lower of cost and fair value. Long- term investments are carried at cost less diminution in value, if any.

F. Inventories

Raw materials, packing materials, stores, spares, consumables and finished goods are valued at cost, after providing for obsolescence, if any.

Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

Work-in-progress is valued at lower of cost of raw material plus proportionate overheads as per AS-2 issued by ICAI. Cost includes all charges incurred for bringing the goods to the location of the manufacturing facilities.

Net realizable value is the estimated selling price in the ordinary course of business, reduced by the estimated costsof completion and costs to effect the sale.

G. Foreign currency transactions

a. Transactions in foreign exchange are accounted for at the exchange rate prevailing on the date of transaction, Gains and losses arising thereon are recognized in the Profitand Loss Account;

b. Foreign currency monetary items are reported using the closing rate, Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

c. In case of forward exchange contracts, difference between the forward rate and the exchange rate on the date of transaction is recognized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

H. Research & Development Expenditure:

Research and Development expenditure, which is of revenue nature, is charged to the Profit & Loss Account and expenditure, which is of capital nature, is added to the cost of Fixed Assets in the year in which these are incurred.

I. Taxes on Income:

Tax expenses for the year comprises of Current tax and Deferred tax. Provision for Current tax is made based on the tax rates and tax laws as applicable to the year. Provision for Deferred tax on account of timing difference is made as per Accounting Standard-22 (AS-22)"Accounting for taxes on income" notified under the Companies (Accounting) Rules, 2014.

J. Retirement Benefits:

Defined Contribution Plan:

The Companies liability towards retirement benefits in the form of Provident Fund and ESIC are considered as defined contribution plan and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. The company contributes to the employees Provident Fund maintained under Statutory Provident Fund Scheme.

Defined Benefit Plan:

The Company operates defined benefit plans for gratuity. The cost of providing such defined contribution is determined using the projected unit credit method (PUCM). The accruing liability towards Gratuity and other retirement benefits are provided on the basis of Actuarial Valuation made by an independent Actuary. The Company fully contributes all ascertained liabilities to the "Tyche Industries Limited Employees Gratuity Trust" (Trust). Trustees administer contributions made to the Trust through a fund managed by Life Insurance Corporation of India (LIC). The Actuarial gains and losses are recognised immediately in the statement of profit and loss account as income or expense.

K. Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. In the opinion of the Management, during the year there is no impairment loss.

L. Confirmation of Balances:

The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

M. Earnings Per Share:

Basic Earnings per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. Segment Reporting:

a. Company's operations are predominantly related to the manufacture and processing of bulk drugs intermediates, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products, the differing risks, returns and internal reporting system.Hence the segmental reporting is based on Domestic and Export sales

b. As a part of secondary reporting, revenues are attributed to geographical areas based on the location of customers as detailed below:

c. The Company does not track its assets and liabilities by geographical area.

O. Provisions

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

P Cash and cash equivalents

Cash and cash equivalents in the cash flow statements comprise Bank balances and cash in hand and short-term investments with an original maturity of three months or less.

Q. Contingent liabilities

A contingent liability is possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognise the contingent liability but discloses its existence in the financial statements.The outstanding liability in respect of the un-expired letters of credit as at 31.03.2015Rs. Nil (PYRs. 29.28 Lakhs )

R. Borrowing cost

Borrowing cost includes interest incurred in connection with the arrangement of borrowings and exchangedifferences arising from foreign currency borrowings to the extent they are regarded as an adjustment to theinterest cost.


Mar 31, 2014

A. Basis of Preparation of Financial Statements

The Company follows the mercantile system of Accounting and recognises Income & Expenditure on accrual basis. The accounts are prepared on historical cost basis and as a ''Going Concern''. The Company has complied with the provisions of the Companies Act, 1956, and complied with the mandatory accounting standards specified in Companies (Accounting Standard) Rules 2006 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs).

Accounting policies not referred to herein otherwise are consistent with Generally Accepted Accounting Principles in India.

B. Fixed assets and depreciation

Fixed assets are carried at the cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Depreciation on fixed assets is provided using the straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed.

C. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognized on dispatch (in respect of exports on the date of the bill of lading or airway bill) which coincides with transfer of significant risks and rewards to customer and is inclusive of excise duty and net of trade discounts, sales returns and sales tax, where applicable. Income from job work services are recognized when services are rendered or related costs are incurred in accordance with the terms of specific contracts. Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

E. Investments:

Long term investments are valued at cost of acquisition. However, provision for diminution in value, if any, is made to recognise a decline other than temporary in the value of investments. Income from investments is recognised in the accounts in the year in which it is received.

F. Inventories

Raw materials, packing materials, stores, spares, consumables and finished goods are valued at cost.

Work-in-progress is valued at lower of cost of raw material plus proportionate overheads as per AS-2 issued by ICAI. Cost includes all charges incurred for bringing the goods to the location of the manufacturing facilities.

Net realizable value is the estimated selling price in the ordinary course of business, reduced by the estimated costs of completion and costs to effect the sale.

G. Foreign currency transactions

a. Transactions in foreign exchange are accounted for at the exchange rate prevailing on the date of transaction, Gains and losses arising thereon are recognized in the Profit and Loss Account;

b. Foreign currency monetary items are reported using the closing rate, Non-monetaryitems which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

c. In case of forward exchange contracts, difference between the forward rate and the exchange rate on the date of transaction is recognized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

H. Research & Development Expenditure:

Research and Development expenditure, which is of revenue nature, is charged to the Profit & Loss Account and expenditure, which is of capital nature, is added to the cost of Fixed Assets in the year in which these are incurred.

I. Taxes on Income:

Tax expenses for the year comprises of Current tax and Deferred tax, Provision for Current taxis made based on the tax rates and tax laws as applicable to the year. Provision for Deferred tax on account of timing difference is made as per Accounting Standard-22 issued by the ICAI.

J. Retirement Benefits:

Defined Contribution Plan:

The Companies liability towards retirement benefits in the form of Provident Fund and ESIC are considered as defined contribution plan and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. The company contributes to the employees Provident Fund maintained under Statutory Provident Fund Scheme.

Defined Benefit Plan:

The Company operates defined benefit plans for gratuity. The cost of providing such defined contribution is determined using the projected unit credit method (PUCM). The accruing liability towards Gratuity and other retirement benefits are provided on the basis of Actuarial Valuation made by an independent Actuary. The Company fully contributes all ascertained liabilities to the "Tyche Industries Limited Employees Gratuity Trust" (Trust). Trustees administer contributions made to the Trust through a fund managed by Life Insurance Corporation of India (LIC). The Actuarial gains and losses are recognised immediately in the statement of profit and loss account as income or expense.

K. Impairment of Assets:

As required by the Accounting Standard (AS-28) "Impairment of Assets", issued by the Institute of Chartered Accountants of India, it is the policy of the company to assess at each balance sheet date whether there is any indication that any fixed asset may be impaired. In the opinion of the Management, during the year there is no impairment loss.

L. Confirmation Of Balances:

The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

M. Earnings Per Share:

Basic Earnings per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. Segment Reporting:

a. Company''s operations are predominantly related to the manufacture and processing of bulk drugs intermediates, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products, the differing risks, returns and internal reporting system. Hence the segmental reporting is based on Domestic and Export sales

O. Provisions

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

P. Cash and cash equivalents

Cash and cash equivalents in the cash flow statements comprise Bank balances and cash in hand and short-term investments with an original maturity of three months or less.

Q. Contingent liabilities

A contingent liability is possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognise the contingent liability but discloses its existence in the financial statements. The outstanding liability in respect of the un-expired letters of credit as at 31.03.2014 Rs. 29.28 Lakhs( P.YRs. nil )

R. Borrowing cost

Borrowing cost includes interest incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

b. Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2014 amount of Dividend per share recognised as distributions to equity shareholders is Rs. 0.50 (March 31,2013: Rs.0.50)


Mar 31, 2013

A. Basis of Preparation of Financial Statements

The Company follows the mercantile system of Accounting and recognises Income & Expenditure on accrual basis. The accounts are prepared on historical cost basis and as a `Going Concern''. The Company has complied with all material aspects with all mandatory accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

Accounting policies not referred to herein otherwise are consistent with Generally Accepted Accounting Principles in India.

B. Fixed assets and depreciation

Fixed assets are carried at the cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Depreciation on fixed assets is provided using the straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed.

C. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognized on dispatch (in respect of exports on the date of the bill of lading or airway bill) which coincides with transfer of significant risks and rewards to customer and is inclusive of excise duty and net of trade discounts, sales returns and sales tax, where applicable. Income from job work services are recognized when services are rendered or related costs are incurred in accordance with the terms of specific contracts. Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

E. Investments:

Long term investments are valued at cost of acquisition. However, provision for diminution in value, if any, is made to recognise a decline other than temporary in the value of investments. Income from investments is recognised in the accounts in the year in which it is received.

F. Inventories

Raw materials, packing materials, stores, spares, consumables and finished goods are valued at cost.

Work-in-progress is valued at lower of cost of raw material plus proportionate overheads as per AS-2 issued by ICAI. Cost includes all charges incurred for bringing the goods to the location of the manufacturing facilities.

Net realizable value is the estimated selling price in the ordinary course of business, reduced by the estimated costs of completion and costs to effect the sale.

G. Foreign currency transactions

a. Transactions in foreign exchange are accounted for at the exchange rate prevailing on the date of transaction, Gains and losses arising thereon are recognized in the Profit and Loss Account;

b. Foreign currency monetary items are reported using the closing rate, Non-monetaryitems which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

c. In case of forward exchange contracts, difference between the forward rate and the exchange rate on the date of transaction is recognized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

H. Research & Development Expenditure:

Research and Development expenditure, which is of revenue nature, is charged to the Profit & Loss Account and expenditure, which is of capital nature, is added to the cost of Fixed Assets in the year in which these are incurred.

I. Taxes on Income:

Tax expenses for the year comprises of Current tax and Deferred tax, Provision for Current taxis made based on the tax rates and tax laws as applicable to the year. Provision for Deferred tax on account of timing difference is made as per Accounting Standard-22 issued by the ICAI.

J. Retirement Benefits:

Defined Contribution Plan:

The Companies liability towards retirement benefits in the form of Provident Fund and ESIC are considered as defined contribution plan and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. The company contributes to the employees Provident Fund maintained under Statutory Provident Fund Scheme.

Defined Benefit Plan:

The Company operates defined benefit plans for gratuity. The cost of providing such defined contribution is determined using the projected unit credit method (PUCM). The accruing liability towards Gratuity and other retirement benefits are provided on the basis of Actuarial Valuation made by an independent Actuary. The Company fully contributes all ascertained liabilities to the "Tyche Industries Limited Employees Gratuity Trust” (Trust). Trustees administer contributions made to the Trust through a fund managed by Life Insurance Corporation of India (LIC). The Actuarial gains and losses are recognised immediately in the statement of profit and loss account as income or expense.

K. Impairment of Assets:

As required by the Accounting Standard (AS-28) "Impairment of Assets”, issued by the Institute of Chartered Accountants of India, it is the policy of the company to assess at each balance sheet date whether there is any indication that any fixed asset may be impaired. During the year there is no impairment loss.

L. Confirmation of Balances:

The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

M. Earnings Per Share:

Basic Earnings per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. Segment Reporting:

a. Company''s operations are predominantly related to the manufacture and processing of bulk drugs intermediates, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products, the differing risks, returns and internal reporting system. Hence the segmental reporting is based on Domestic and Export sales

b. As a part of secondary reporting, revenues are attributed to geographical areas based on the location of customers as detailed below:

c. The Company does not track its assets and liabilities by geographical area.

O. Provisions

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

P. Cash and cash equivalents

Cash and cash equivalents in the cash flow statements comprise Bank balances and cash in hand and short-term investments with an original maturity of three months or less.

Q. Contingent liabilities

A contingent liability is possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognise the contingent liability but discloses its existence in the financial statements. The outstanding liability in respect of the un-expired letters of credit as at 31.03.2013Rs. Nil( P.YRs0.11Crores)

R. Borrowing cost

Borrowing cost includes interest incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.


Mar 31, 2010

ACCOUNTING ASSUMPTIONS :

a) Accounting Systems:

These Financial Statements have been prepared under the historical Cost convention in accordance with the generally accepted accounting principles applicable, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the company, on the basis of going concern with revenues recognized and expenses accounted for on their accrual, including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the year.

b) Fixed Assets:

Fixed Assets are stated at historical cost of acquisition, which is inclusive of freight, installation charges, duties and incidental expenses, less depreciation to date.

c) Current Assets:

In the opinion of Board of Directors, save as otherwise stated, the Current Assets, Loans & advances have been stated at value realizable in the course of business as a going concern.

d) Liabilities:

In the opinion of Board of Directors provisions have been made for all known Liabilities.

e) Depreciation:

Depreciation on fixed assets is provided on the basis of Straight Line Method at the rates provided in Schedule-XIV of the Companies Act, 1956 for the period of the usage of the assets.

f) Revenue Recognition:

Revenues from Sale of goods Manufactured by the company are recognized as and when the significant risks and rewards of ownership are transferred to the buyer. The major activity of the company during the year is only manufacturing of chemicals, bulk drugs and drug intermediaries.

g) Foreign Currency Transactions:

Transactions in foreign exchange are accounted for at the exchange rates prevailing on the date of the transactions. Gains/losses arising out of fluctuations in exchange rates are accounted for on realization of the monies, in the profit & loss account. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at year-end rates the resultant exchange difference is recognized in the profit and loss account further non- monetary assets are recorded at the rates prevailing on the date of the transaction.

(h) Retirement Benefits:

The companys liability towards retirement benefits in the form of provident fund is charged to the revenue expenditure as and when paid. The contribution in respect of provident fund is charged at its actual as per Employees Provident fund and Miscellaneous provision Act, 1952 as amended from time to time. The company liability in the form of Gratuity and Encashment of leave salary is charged to revenue expenditure as and when paid, as per the policy of the company and no specific provision is made in books of account in this regard as mandated by ICAI.

i) Segmental Reporting.

The company has income from only one segment of manufacturing and processing of Fine nheminals

k) Investments:

The surplus funds of the company are deployed in the units of the mutual funds to earn income thereon. These investments are in the nature of Long term Non trade investments and as such are shown under the head INVESTMENTS in the balance sheet as per details given in the Schedule- III.

i) In compliance with the Accounting standard relating to "Accounting for Taxes on Income "issued by ICAI, Deferred Tax liability (Net) accruing during the year amounting to Rs 15.68 lacs has been provided in the profit and loss account.

m) IMPAIRMENT OF ASSETS:

As required by the Accounting standard "Impairment of Assets", issued by the institute of chartered accountants of India, the company assesses at each balance sheet date whether there is any indication that an asset may be impaired. The Management confirms that there has been no such impairment loss during the year.

 
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