Home  »  Company  »  Unichem Labs  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Unichem Laboratories Ltd. Company

Mar 31, 2017

1 Corporate information

These financial statements comprise standalone financial statements of Unichem Laboratories Limited (the company) for the year ended 31st March, 2017. The company is a public company domiciled in India and is incorporated under the provisions of the Companies act 1956. Its shares are listed on recognized stock exchanges, namely BSE Limited and National Stock Exchange of India limited in India. The registered office of the Company is located at "Unichem Bhavan", Prabhat Estate, Off S V Road, Jogeshwari (West), Mumbai - 400 102.

The Company is engaged in manufacturing of pharmaceutical products.

These financial statements were authorized for issue in accordance with a resolution of the Directors on 30th May 2017.

2 Significant accounting policies

2.1 Basis of preparation and presentation

These financial statements of the company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Company.

For all periods up to and including the year ended 31st March 2015, the financial statements of the company are prepared under historical cost convention, on accrual basis, in accordance with the provisions of the Companies Act , as applicable and the accounting principles generally accepted in India and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

These are the first Ind AS Financial statements. The date of transition to the Ind AS is April 1, 2015. Refer note 2.2(p) for information on how the company has adopted Ind AS.

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period :

(i) Derivative financial instruments

(ii) Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).

The financial statements are presented in INR and all values are rounded to the nearest lacs, except when otherwise indicated.

2.2 Summary of significant accounting policies

a. 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, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.

Recovery of excise duty flows to the company on its own account, revenue includes excise duty. However, sales tax/ value added tax (VAT) is not received by the company on its own account. Hence tax collected on value added to the commodity on behalf of the government is excluded from revenue.

Sale of Goods

Revenue from sale of goods is recognized after satisfying following conditions.

i) The company has transferred to the buyer, the significant risk and rewards of ownership of the goods.

ii) The company neither retains continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

iii) The amount of revenue can be measured reliably.

iv) It is probable that, economic benefits associated with the transactions will flow to the Company.

v) The costs incurred or to be incurred in respect of transaction can be measured reliably.

Sales are net of sales tax, discount, claims for date expired goods & breakage but inclusive of excise duty and rate differences, if any.

Revenue from Product development charges is recognized as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts.

Other Operating Revenue

Benefits on account of entitlement to import of goods free of duty under the ''Duty Entitlement Pass Book under Duty Exemption Scheme'' and benefits on account of ''export promotion schemes'' is accounted when the right to receive is reasonably certain.

Interest income

Interest income (except interest on Income tax refund which is accounted on Cash basis) is recognised on a time proportion basis taking into account the amount outstanding and at effective rate applicable when it is probable that the economic benefits will flow and the amount can be measured reliably.

Dividend income

Dividend income from investment is recognized when the right to receive payment is established, which is generally when shareholders approve the dividend.

b. Leases

A lease is classified at the inception date as financial lease whenever the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee. All other lease are classified as operating lease.

Finance leases are capitalized at the inception date at fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets., in which case they are capitalized in accordance with policy on the borrowing costs.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

c. Foreign Currency Transactions

The functional currency for presentation of financial statements is INR.

Transactions in foreign currencies are initially recorded by the company at its respective functional currency spot rates at the date the transaction first qualifies for recognition. The exchange difference arising on actual settlement of monetary items are recognized in the profit and loss account of the year.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

d. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

e. Government Grants

Government grants are accounted when there is a reasonable assurance that the company will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made.

Government grants are recognized in profit or loss on systematic basis over the periods in which company recognizes as expenses the related cost for which the grants are intended to compensate.

Government grants received towards purchase, construction or acquisition of non current assets are recognized as deferred revenue in the financial statement and transferred to profit and loss on systemic and rational basis over the useful life of the related asset.

When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the fair value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.

f. Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognized in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance schemes, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis. The company has no obligations other than the contribution payable.

(b) Defined Benefit Plan

Defined Benefit Plans in form of gratuity and compensated absences are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using projected unit credit method. Actuarial gain or loss on remeasurement of defined benefit gratuity plan is charged to other comprehensive income not reclassified to profit and loss account.

(c) Post employment obligations

Compensation paid to employees under Voluntary Retirement Scheme is recognized as an expense when incurred.

g. Share-based payments

Equity-settled share based payments to employees are measured at the fair value of equity instruments at the grant date. (See Note no 51)

The fair value determined on the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on company''s estimate of equity instruments, that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the company revises its estimates of the number of equity instruments expected to be vested. The impact of the revision of estimates, if any, is recognized in profit and loss account such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Ind AS 102 Share based payments.

h. Taxation

Income tax expenses represents sum of current tax payable and deferred tax.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered or paid in accordance with the Income Tax Act, 1961.

Current income tax relating to items recognized outside profit or loss is recognized either in other comprehensive income or in equity.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets & liabilities in the financial statements and corresponding tax bases used in computation of taxable profit.

Deferred tax liabilities generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for deductable temporary difference to the extent that it is probable that taxable profit will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the assets to be recovered.

Current & deferred tax for the year

Current & deferred tax are recognized in profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity.

i. Property, plant & equipment

Property, plant & equipment held for use in the production or supply of goods or services or for administration purpose, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment loss. Freehold land is not depreciated.

Properties in the course of construction (capital work-in-progress) for production, supply or administration purpose are carried at cost, less any impairment loss. Cost includes any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use. In respect of qualifying assets, borrowing cost are capitalized. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

Advances paid towards the acquisition of fixed assets outstanding at balance sheet date are disclosed as Capital Advances under Note " Other non-current assets".

No assets classified as held for sale or included in disposal group classified as held for sale.

Depreciation is recognized so as to write off the cost of assets (other than free hold land and capital work-in-progress) less their residual values over their useful lives, using following methods at rates specified in Part C of schedule II of The Companies Act, 2013.

a) Straight- Line Method on Buildings and Plant & Machinery, computer & server (office equipment)

b) Written Down Value Method on other PPE

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance lease are depreciated over their expected useful lives on the same basis as owned assets.

Estimated useful lives of the PPEs are as follows :

Buildings : 30 to 60 years

Plant and Equipments : 10 to 15 years

Furniture & Fixture : 10 years

Vehicles : 8 years

Office Equipment : 5 years

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognized in profit or loss.

Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

The existence and amounts of restrictions on title and property, plant and equipment pledged as security for liabilities ( see note 39)

For transition to Ind AS, the company has elected to continue with the carrying value of all its property, plant and equipment recognized as of April 1, 2015 measured as per the previous Accounting standards and that carrying value as its deemed cost as of the transition date.

j. Intangible assets

Intangible assets are amortized on straight line basis over the useful lives of the assets not exceeding 10 years.

For transition to Ind AS, the company has elected to continue with the carrying value of all its intangible assets recognized as of April 1, 2015 measured as per the previous Accounting standards and that carrying value as its deemed cost as of the transition date.

k. Inventories

Inventories are valued after providing for obsolescences as under :

(a) Stock of Raw materials is valued at lower of cost or Net realizable value ,which includes duties and taxes ( Except those subsequently recoverable ).

(b) Stock of Packing materials & Stores and spares is valued at cost ,which includes duties and taxes ( Except those subsequently recoverable ).

(c) Stock of Finished products including traded goods and Semi finished goods is valued at lower of cost or net realizable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

l. Provisions, Contingent liabilities and Contingent assets

Provision is recognized when the company has a present obligation (Legal or Constructive) as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

Use of estimates

The preparation of financial statements in conformity with Indian Accounting Standards (Ind AS) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

Provision for Doubtful Receivables & Advances

A percentage based provision is made for receivables & advances outstanding for more than one year based on ageing analysis thereof and a specific provision is made where management estimates and in cases where the collection of debt is uncertain.

m. Research and Development Expenses

Expenditure on research activities is recognized as an expense in the period in which it is incurred. Development expenditure of an individual project are recognized as an intangible asset when the company can demonstrate:

a) The technical feasibility of completing the intangible asset so that the asset will be available for use or sale.

b) Its intention to complete and its ability and intention to use or sell the asset.

c) How the asset will generate future economic benefits.

d) The availability of resources to complete the asset.

e) The ability to measure reliably the expenditure during development.

n. Financial instruments

A financial Instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognition and measurement.

Financial assets and financial liabilities are recognized when the company becomes party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value.

Transaction cost that are directly attributable to the acquisition or issue of financial assets or liabilities (other than measured at fair value through profit and Loss (FVTPL) are added to or deducted from fair value of financial assets or liabilities on initial recognition.

Transaction cost that are directly attributable to the acquisition or issue of financial assets or liabilities measured at fair value through profit and loss are immediately recognized in profit and loss.

Subsequent measurement

All financial assets and liabilities are subsequently measured depending on classification either at

(i) Amortized Cost.

(ii) Fair Value through Other Comprehensive income (FVTOCI).

(iii) Fair value through profit and loss (FVTPL).

Effective interest method (EIR)

The effective interest method is a method of calculating amortized cost of debt instrument and allocating interest income / interest cost over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that forms integral part of effective interest rate, transaction costs and other premiums or discounts) through the expected life of debt instrument. Income recognized on effective interest rate is recognized in profit and loss and is included in "Other income". Interest cost recognized on effective interest rate is recognized in profit and loss and is included in "Finance Cost".

Hedge accounting

The company designates certain hedging instruments, which include forward contracts in respect of foreign currency risk. Hedge of foreign exchange risk on firm commitments are accounted for as cash flow hedge.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged items, along with risk management objectives and its strategy for undertaking various hedge transactions.

Investments

Investments that are readily realizable and intended to be held for not more than 12 months are classified as current investments. Current investments are measured at fair value. Changes in fair value of current investments are recognized in profit & Loss.

All other investments are classified as long-term investment. Long-term investments in Subsidiaries and Associates are carried at cost as per Ind AS 27. Impairment loss is recognized for decline in carrying amount of long term investments.

Other Long term equity Investments are measured at fair value through profit and loss (FVTPL).

Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using EIR method. Loans and borrowings at below market rate of interest initially measured at fair value, fair value changes netted in carrying value, subsequently measured at amortized cost.

Impairment of financial Assets

The company has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date of financial instrument were initially recognized. The company has not undertaken exhaustive search for information for significant increase in credit risk since initial recognition at the date of transition to Ind AS.

Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at bank, cash in hand and short term deposits, which are subject to an insignificant risk of changes in value.

Cash and cash equivalent in the cash flow statement comprise cash at bank, cash in hand, short term deposits, which are subject to an insignificant risk of changes in value and net outstanding bank overdrafts as they are considered an integral part of company''s cash management.

o. Earnings per share

Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are determined independently for each period presented.

p. First-time adoption- Mandatory exceptions, optional exemptions

The Company has prepared opening balance sheet as per Ind As as on 1st April 2015 (Transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing assets and liabilities

which are not permitted by Ind AS, by reclassifying items from previous Accounting standards to Ind AS as required by Ind AS,and applying Ind AS in measurement of recognized assets and liabilities. Subject to certain exceptions and optional exemptions availed as detailed below.

Derecognition of Financial assets and Financial Liabilities

The Company has applied derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1st April 2015 (Transition date).

Deemed cost for property, plant and equipments, Intangible assets & Capital work in progress.

The company has elected to continue with the carrying values of all of its Property, plant and equipments, Intangible assets and Capital work in progress recognized as of 1st April 2015 (transition date) measured as per previous GAAP and use that carrying value as its deemed cost as on the transition date.

Government Loan

The Company has measured as per Ind AS 109 and Ind AS 20 retrospectively to government loan originated before date of transition to Ind AS (Ind-AS 101 Appendix B Para B11).


Mar 31, 2016

I. Basis of Accounting

The financial statements are prepared under historical cost convention,on accrual basis, in accordance with the provisions of the Companies Act , 2013 and the accounting principles generally accepted in India and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

ii. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates.Any revision to accounting estimates is recognized prospectively in current and future periods.

iii. Inventories

Inventories are valued after providing for obsolescences as under:

a. Stock of Raw materials are valued at lower of cost or Net realisable value ,which includes duties and taxes ( Except those subsequently recoverable).

b. Stock of Packing materials & Stores and spares are valued at cost,which includes duties and taxes ( Except those subsequently recoverable).

c. Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

iv. Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use.

Cost of fixed assets not ready for their intended use at balance sheet date are disclosed under capital work-in- progress.

Advances paid towards the acquisition of fixed assets outstanding at balance sheet date are disclosed as Capital Advances under Note " Long term Loans & advances".

Depreciation is provided on Straight- Line Method on Buildings and Plant & Machinery , and on Written Down Value Method on other fixed assets at rates specified in Part C of schedule II of The Companies Act, 2013.

Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years.

v. Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

vi. 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 sales of goods is recognized when significant risks and rewards of ownership are transferred to the customers.

Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences, if any.

Revenue from Product development charges is recognized as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts.

Benefits on account of entitlement to import of goods free of duty under the ''Duty Entitlement Pass Book under Duty Exemption Scheme1 and benefits on account of ''export promotion schemes'' is accounted when the right to receive is reasonably certain.

Interest income (except interest on Income tax refund which is accounted on Cash basis.) is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable

Dividend income from investment is recognized when the right to receive payment is established.

vii. Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction.

The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year.

Monetary assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognized in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognized as gain / loss in the Profit and Loss account for the period.

viii. Government Grants

Government Grants , if any , are accounted when there is a reasonable assurance that the enterprise will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made.

Grants on capital account are deducted from the cost of respective assets to which they relate. The unspent amount at the year end if any, is shown as current liabilities.

Grants on revenue account are credited to Profit & Loss account under the head other receipts and the relevant expenses are debited to respective heads. The unspent amount at the year end if any is shown as current liabilities.

ix. Investments

Investments that 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.Provisions are recognized for any decline, other than temporary, in the carrying value of long term investments as determined by the management.

x. Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognized in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance schemes, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absences are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit & Loss A/c for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognized as an expense when incurred.

xi. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

xii. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to profit & loss account as incurred.

xiii. Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

xiv. Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961. Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of deferred tax assets are reviewed to reassure realisation.

xv. Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use.

In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

xvi. Provisions, Contingent liabilities and Contingent assets

Provision is recognized when the company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognized in the financial statements.

Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

xvii. Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Company''s stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

xviii. Provision for Doubtful Receivables & Advances

A percentage based provision is made for receivables & advances outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.

''includesRs. 116.69 lacs (Previous Year Rs. 91.97 lacs) paid under protest/deposit pending adjudication under Income tax Act ,1961 and Central Excise Act 1944.

(iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.


Mar 31, 2015

I. Basis of Accounting

The financial statements are prepared under historical cost convention, on accrual basis, in accordance with the provisions of the Companies Act, 2013 and the accounting principles generally accepted in India and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

ii. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

iii. Inventories

Inventories are valued after providing for obsolescences as under :

a. Stock of Raw materials are valued at lower of cost or Net realisable value, which includes duties and taxes (Except those subsequently recoverable).

b. Stock of Packing materials & Stores and spares are valued at cost, which includes duties and taxes (Except those subsequently recoverable).

c. Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

iv. Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use.

Cost of fixed assets not ready for their intended use at balance sheet date are disclosed under capital work-in- progress.

Advances paid towards the acquisition of fixed assets outstanding at balance sheet date are disclosed as Capital Advances under Note "Long term Loans & advances".

Depreciation is provided on Straight- Line Method on Buildings and Plant & Machinery, and on Written Down Value Method on other fixed assets at rates specified in Part C of schedule II of The Companies Act, 2013.

Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years.

Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

vi. 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 sales of goods is recognized when significant risks and rewards of ownership are transferred to the customers.

Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences, if any.

Revenue from Product development charges is recognized as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts.

Benefits on account of entitlement to import of goods free of duty under the ''Duty Entitlement Pass Book under Duty Exemption Scheme'' and benefits on account of ''export promotion schemes'' is accounted when the right to receive is reasonably certain.

Interest income (except interest on Income tax refund which is accounted on Cash basis.) is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend income from investment is recognized when the right to receive payment is established.

vii. Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year.

Monetary assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognized in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognized as gain / loss in the Profit and Loss account for the period.

viii. Government Grants

Government Grants, if any, are accounted when there is a reasonable assurance that the enterprise will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made.

Grants on capital account are deducted from the cost of respective assets to which they relate. The unspent amount at the year end if any, is shown as current liabilities.

Grants on revenue account are credited to Profit & Loss account under the head other receipts and the relevant expenses are debited to respective heads. The unspent amount at the year end if any is shown as current liabilities.

ix Investments

Investments that 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. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investments as determined by the management.

Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognized in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance schemes, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absences are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit & Loss A/c for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognized as an expense when incurred.

xi. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

xii. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to profit & loss account as incurred.

xiii. Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

xiv. Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961. Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of deferred tax assets are reviewed to reassure realisation.

xv. Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

xvi. Provisions, Contingent liabilities and Contingent assets

Provision is recognized when the company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements.

Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

xvii. Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Company''s stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

xviii. Provision for Doubtful Receivables & Advances

A percentage based provision is made for receivables & advances outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.


Mar 31, 2013

I. Basis of Accounting

The financial statements are prepared under historical cost convention, on accrual basis, in accordance with the provisions of Companies Act,1956 and the accounting principles generally accepted in India and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules,2006.

ii. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii. Inventories

Inventories are valued after providing for obsolescences as under :

Stock of Raw materials are valued at lower of cost or Net realisable value, which includes duties and taxes (Except those subsequently recoverable).

Stock of Packing materials & Stores and spares are valued at cost, which includes duties and taxes (Except those subsequently recoverable).

Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes.

Cost is determined on weighted average basis.

iv. Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use. Cost of fixed assets not ready for their intended use at balance sheet date are disclosed under capital work-in-progress.

Advances paid towards the acquisition of fixed assets outstanding at balance sheet date are disclosed as Capital Advances under Note " Long term Loans & advances".

Depreciation is provided on Straight- Line Method on Buildings and Plant & Machinery except mentioned below and on Written Down Value Method on other fixed assets at rates specified in schedule XIV of Companies Act, 1956. Higher rates are considered based on useful lives of the assets determined by management as under;

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years.

Assets costing individually upto Rs. 5,000 are written off to revenue. Assets costing between Rs. 5,000 and Rs.15,000 are depreciated fully in the year of purchase except when value of individual assets purchased in aggregate exceeds Rs.1,00,000

v. Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

vi. Revenue Recognition

Revenue is recognised 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 sales of goods is recognised when significant risks and rewards of ownership are transferred to the customers.

Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences , if any.

Revenue from Product development charges is recognised as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts.

Benefits on account of entitlement to import of goods free of duty under the ''Duty Entitlement Pass Book under Duty Exemption Scheme'' and benefits on account of export promotion schemes is accounted when the right to receive is reasonably certain.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend income from investment is recognized when the right to receive payment is established.

vii. Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction.

The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year. Monetary assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognised in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognised as gain / loss in the Profit and Loss account of the period.

viii. Investments

Investments that 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. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investment as determined by management.

ix. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

x. Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognised in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance schemes, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absences are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit & Loss A/c for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognised as an expense when incurred.

xi. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to profit & loss account as incurred.

xii. Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

xiii. Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

xiv. Provisions, Contingent liabilities and Contingent assets

Provision is recognized when the company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognized in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

xv. Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-basedPayments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Company''s stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

xvi. Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961. Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of deferred tax assets are reviewed to reassure realisation.

xvii. Provision for Doubtful Receivables & Advances

A percentage based provision is made for receivables & advances outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.


Mar 31, 2012

I. Basis of Accounting

The financial statements are prepared under historical cost convention, on accrual basis, in accordance with the provisions of Companies Act,1956 and the accounting principles generally accepted in India and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules,2006.

ii. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii. Inventories

Inventories are valued after providing for obsolescences as under :

Stock of Raw materials are valued at lower of cost or Net realisable value, which includes duties and taxes (Except those subsequently recoverable).

Stock of Packing materials & Stores and spares are valued at cost, which includes duties and taxes (Except those subsequently recoverable).

Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

iv. Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use. Cost of fixed assets not ready for their intended use at balance sheet date are disclosed under capital work-in-progress.

Advances paid towards the acquisition of fixed assets outstanding at balance sheet date are disclosed as Capital Advances under Note " Long term Loans & advances".

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years.

Assets costing individually upto Rs. 5,000 are written off to revenue. Assets costing between Rs. 5,000 and Rs. 15,000 are depreciated fully in the year of purchase except when value of individual assets purchased in aggregate exceeds Rs. 1,00,000.

v. Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

vi. Revenue Recognition

Revenue is recognised 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 sales of goods is recognised when significant risks and rewards of ownership are transferred to the customers. Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences , if any.

Revenue from Product development charges is recognised as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts. Benefits on account of entitlement to import of goods free of duty under the 'Duty Entitlement Pass Book under Duty Exemption Scheme' and benefits on account of export promotion schemes is accounted when the right to receive is reasonably certain. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income from investment is recognized when the right to receive payment is established.

vii. Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year. Monetary assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognised in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognised as gain / loss in the Profit and Loss account of the period.

viii. Investments

Investments that 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. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investment as determined by management.

ix. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

x. Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognised in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance schemes, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absences are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit & Loss A/c for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognised as an expense when incurred.

xi. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to Profit & Loss account as incurred.

xii. Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

xiii. Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognised immediately as income in the Profit and Loss account.

xiv. Provisions, Contingent liabilities and Contingent assets

Provision is recognized when the Company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognized in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

xv. Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Company's stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

xvi. Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to realise these assets. All other deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of deferred tax assets are reviewed to reassure realisation.

xvii. Provision for Doubtful Receivables

A percentage based provision is made for debtors outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.


Mar 31, 2011

1 Basis of Accounting

The financial statements are prepared under historical cost convention,on accrual basis,in accordance with the provisions of Companies Act,1956 and the accounting principles generally accepted in India and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules,2006.

2 Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

3 Inventories

Inventories are valued after providing for obsolescenses as under :

Stock of Raw materials are valued at lower of cost or Net realisable value ,which includes duties and taxes ( Except

those subsequently recoverable).

Stock of Packing materials & Stores and spares are valued at cost ,which includes duties and taxes ( Except those subsequently recoverable).

Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value.

However Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

4 Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date are disclosed under capital work-in-progress

Depreciation is provided on Straight- Line Method on Buildings and Plant & Machinery except mentioned below and on Written Down Value Method on other fixed assets at rates specified in schedule XIV of Companies Act, 1956. Higher rates are considered based on useful lives of the assets determined by management as under;

Depreciation methods, useful lives and residual values are reviewed at each reporting date. Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years. Assets costing individually upto Rs. 5,000 are written off to revenue. Assets costing between Rs. 5,000 and Rs. 15,000 are depreciated fully in the year of purchase except when value of individual assets purchased in aggregate exceeds Rs. 100,000.

5 Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

6 Revenue Recognition

Revenue is recognised 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 sales of goods is recognised when significant risks and rewards of ownership are transferred to the customers. Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences , if any.

Revenue from Product development charges is recognised as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts. Benefits on account of entitlement to import of goods free of duty under the Duty Entitlement Pass Book under Duty Exemption Scheme and benefits on account of export promotion schemes is accounted when the right to receive is reasonably certain. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income from investment is recognised when the right to receive payment is established.

7 Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year. Monetory assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognised in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognised as gain / loss in the Profit and Loss account of the period.

8 Investments

Investments that 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. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investment as determined by management.

9 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

10 Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognised in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance scheme, employee pension scheme and superannuation are recognised in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absenses are provided on the basis of actuarial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit & Loss A/c for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognised as an expense when incurred.

11 Leases

Leases where the lessor effectively retains substanially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to profit & loss account as incurred.

12 Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

13 Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arms length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

14 Provisions, Contingent liabilities and Contingent assets

Provision is recognised when the Company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

15 Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Companys stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortised over the vesting period of the option on a straight line basis.

16 Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to realise these assets. All other deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of defered tax assets are reviewed to reassure realisation.

The levy of Fringe Benefit Tax(FBT) is not applicable as the Finance (No.2) Act, 2009 has abolished FBT with effect from Financial Year 2009-2010.

17 Provision for Doubtful Debts

A percentage based provision is made for debtors outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.


Mar 31, 2010

1 Basis of Accounting

The financial statements are prepared under historical cost convention, on accrual basis ,in accordance with the provisions of Companies Act,1956 and the accounting principles generally accepted in India and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules,2006.

2 Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

3 Inventories

Inventories are valued after providing for obsolescenses as under :

Stock of Raw materials are valued at lower of cost or Net realisable value, which includes duties and taxes (Except those

subsequently recoverable).

Stock of Packing materials & Stores and spares are valued at cost ,which includes duties and taxes (Except those subsequently recoverable).

Stock of Finished products including traded goods and Semi finished goods are valued at lower of cost or net realisable value. However, Raw materials & Semi finished goods held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost includes material cost, labour, direct expenses, related production overheads and applicable taxes. Cost is determined on weighted average basis.

4 Fixed Assets and Depreciation/Amortisation

Fixed Assets are recorded at cost including any directly attributable expenses incurred (net of recoverable taxes) to bring the assets to working condition for their intended use. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date are disclosed under capital work-in-progress

Depreciation is provided on Straight- Line Method on Buildings and Plant & Machinery except mentioned below and on Written Down Value Method on other fixed assets at rates specified in Schedule XIV of Companies Act, 1956. Higher rates are considered based on useful lives of the assets determined by management as under;

Assets Rates

Plant & Machiney (Lab Equipments) 4.75% to 20%

Computers and Softwares 16.21% to 25%

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Leasehold Land is amortised over the period of lease. Intangible assets are amortised on straight line basis over the useful lives of the assets not exceeding 10 years.

Assets costing individually upto Rs. 5,000 are written off to revenue. Assets costing between Rs. 5,000 and Rs. 15,000 are depreciated fully in the year of purchase except when value of individual assets purchased in aggregate exceeds Rs. 100,000.

5 Research and Development Expenses

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

6 Revenue Recognition

Revenue is recognised 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 sales of goods is recognised when significant risks and rewards of ownership are transferred to the customers. Sales are net of sales tax, claims for date expired goods & breakage but inclusive of excise duty and rate differences, if any.

Revenue from Product development charges is recognised as and when services are rendered and related costs are incurred in accordance with the terms of the specific contracts. Benefits on account of entitlement to import of goods free of duty under the Duty Entitlement Pass Book under Duty Exemption Scheme and benefits on account of export promotion schemes is accounted when the right to receive is reasonably certain.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income from investment is recognized when the right to receive payment is established.

7 Foreign Currency Transactions

The transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. The exchange difference arising on actual settlement of foreign exchange transaction are recognized in the Profit and Loss Account of the year.

Monetory assets and liabilities in foreign exchange, which are outstanding as at the year end, are translated at the year end at the closing rate and the resultant exchange differences are recognised in the Profit and Loss Account.

Investments in foreign subsidiaries are recorded in Indian currency at the rate of exchange prevailing at the time when the original investments were made.

The premium or discounts arising at the inception of forward exchange contract is amortised as expense or income over the life of contract. Exchange differences on such contracts are recognised as gain / loss in the Profit and Loss Account of the period.

8 Investments

Investments that are readily realisable and intended to be held 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. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investment as determined by management.

9 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

10 Employee Benefits Short Term Employee Benefits

Short term employee benefits are recognised in the Profit and Loss Account as an expense at their undiscounted amount.

Long Term Employee Benefits

(a) Defined Contribution Plans

Employee benefits in the form of employees provident fund scheme, employee state insurance scheme, employee pension scheme and superannuation are recognized in the Profit and Loss Account on accrual basis.

(b) Defined Benefit Plan

Defined Benefit Plans in form of Gratuity and Compensated Absenses are provided on the basis of acturial valuations, as at the balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gain or loss is charged in Profit and Loss Account for the year.

Termination Benefits

Compensation paid to employees under Voluntary Retirement Scheme is recognised as an expense when incurred.

11 Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of leased assets are classified as operating leases. Lease rentals for asset taken on operating lease are charged to Profit and Loss Account as incurred.

12 Earnings per share

The basic earning per share ("EPS") is calculated by dividing the Profit/(Loss) after Tax by the weighted average number of Equity Shares outstanding. The diluted EPS is calculated after adjusting the weighted average number of Equity shares to give effect to the potential equity shares on the stock options outstanding.

13 Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arms length transaction between knowledgeable, willing parties, less the cost of disposal. Reversal of impairment loss is recognised immediately as income in the Profit and Loss Account.

14 Provisions, Contingent liabilities and Contingent assets

A Provision is recognised when the Company has a present obligation as a result of past events and it is probable that outflow of resources will be required to settle the obligation, in respect of which reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

15 Employees Stock Compensation Costs

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost as excess of the fair value of the Companys stock on the stock option grant date over the exercise price. Compensation expense, if any, is amortised over the vesting period of the option on a straight line basis.

16 Taxation

Current tax is measured at an amount payable for the period in accordance with the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to realise these assets. All other deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. At each Balance Sheet date, the carrying value amount of deferred tax assets are reviewed to reassure realisation.

The levy of Fringe Benefit Tax (FBT) is not applicable as the Finance (No.2) Act,2009 has abolished FBT with effect from Financial Year 2009-2010.

17 Provision for Doubtful Debts

A percentage based provision is made for debtors outstanding for more than one year based on ageing analysis thereof and a specific provision is made in cases where the collection of debt is uncertain.

Find IFSC