Mar 31, 2018
1.1 Summary of significant accounting policies
I. Significant Accounting Estimates and Judgments
Estimates, assumptions concerning the future and judgments are made in the preparation of the financial statements. They affect the application of the Companyâs accounting policies, reporting amounts of assets, liabilities, income and expense and disclosures made. Although these estimates are based on managementâs best knowledge of current events and actions, actual result may differ from those estimates.
The critical accounting estimates and assumptions used and areas involving a high degree of judgments are described below:
Use of estimation and assumptions
In the process of applying the entityâs accounting policies, management had made the following estimation and assumptions that have the significant effect on the amounts recognised in the financial statements.
Income tax
The company recognizes tax liabilities based upon self-assessment as per the tax laws. When the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such final determination is made.
Property, plant and equipment & Intangible Assets
Key estimates related to long-lived assets (property, plant and equipment, mineral leaseholds and intangible assets) include useful lives, recoverability of carrying values and the existence of any retirement obligations. As a result of future decisions, such estimates could be significantly modified. The estimated useful lives of long-lived assets is applied as per the Schedule II of Companies Act, 2013 and estimated based upon our historical experience, engineering estimates and industry information. These estimates include an assumption regarding periodic maintenance and an appropriate level of annual capital expenditures to maintain the assets.
Employee Benefits- Measurement of Defined Benefit Obligation
Management assesses post-employment and other employee benefit obligations using the projected unit credit method based on actuarial assumptions which represent managementâs best estimates of the variables that will determine the ultimate cost of providing post-employment and other employee benefits.
II. Property, Plant and Equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Cost includes its purchase price (after deducting trade discounts and rebates), import duties & non-refundable purchase taxes, any costs directly attributable to bringing the asset to the location & condition necessary for it to be capable of operating in the manner intended by management, borrowing costs on qualifying assets and asset retirement costs. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.
The cost of replacing a part of an item of property, plant and equipment is capitalized if it is probable that the future economic benefits of the part will flow to the Company and that its cost can be measured reliably. The carrying amount of the replaced part is derecognized.
Costs of day to day repairs and maintenance costs are recognized into the statement of profit and loss account as incurred.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The residual values, estimated useful lives and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.
An item of plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de recognition of the asset is recognised in the profit or loss in the year the asset is derecognized.
Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.
Depreciation
Depreciation is provided on Straight Line Method, as per the provisions of schedule II of the Companies Act, 2013 or based on useful life estimated on the technical assessment. Asset class wise useful lives in years are as under:
Plant and Machinery 1 to 25
Computers and equipment 3 to 6
Furniture & fixtures 10 to 15
Vehicles 8 to 10
Office equipment 5 to 15
Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.
In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.
Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.
III. Intangible Assets
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. The company amortizes Computer software using the straight-line method over the period of 6 years.
IV. Financial Assets
Financial assets comprise of investments in equity and debt securities, trade receivables, cash and cash equivalents and other financial assets.
Initial recognition:
All financial assets are recognised initially at fair value. Purchases or sales of financial asset that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the assets.
Subsequent Measurement:
(i) Financial assets measured at amortised cost:
Financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortised cost using effective interest rate (EIR) method. The EIR amortization is recognised as finance income in the Statement of Profit and Loss.
The Company while applying above criteria has classified the following at amortised cost:
a) Trade receivable
b) Cash and cash equivalents
c) Other Financial Asset
(ii) Financial assets at fair value through other comprehensive income (FVTOCI):
Financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, selling the financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at FVTOCI.
Fair Value movements in financial assets at FVTOCI are recognised in other comprehensive income.
Equity instruments held for trading are classified as at fair value through profit or loss (FVTPL). For other equity instruments the company classifies the same as at FVTOCI. The classification is made on initial recognition and is irrevocable. Fair value changes on equity investments at FVTOCI, excluding dividends are recognised in other comprehensive income (OCI).
(iii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through profit or loss if it does not meet the criteria for classification as measured at amortised cost or at fair value through other comprehensive income. All fair value changes are recognised in the statement of profit and loss.
(iv) Investment in subsidiaries, joint ventures & associates are carried at cost in the separate financial statements.
Impairment of Financial Assets:
Financial assets are tested for impairment based on the expected credit losses.
(i) Trade Receivables
An impairment analysis is performed at each reporting date. The expected credit losses over life time of the asset are estimated by adopting the simplified approach using a provision matrix which is based on historical loss rates reflecting current condition and forecasts of future economic conditions. In this approach assets are grouped on the basis of similar credit characteristics such as industry, customer segment, past due status and other factors which are relevant to estimate the expected cash loss from these assets.
(ii) Other financial assets
Other financial assets are tested for impairment based on significant change in credit risk since initial recognition and impairment is measured based on probability of default over the life time when there is significant increase in credit risk.
De-recognition of financial assets A financial asset is derecognized only when:
- The company has transferred the rights to receive cash flows from the financial asset or
- The contractual right to receive cash flows from financial asset is expired or
- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset and transferred substantially all risks and rewards of ownership of the financial asset, in such cases the financial asset is derecognized. Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is also derecognized if the company has not retained control of the financial asset.
V. Impairment of Non-Financial Assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
VI. Cash and Cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. Deposits with banks subsequently measured at amortized cost and short term investments are measured at fair value through Profit & Loss account.
VII. Share Capital
Equity shares are classified as equity.
VIII. Financial Liabilities
Initial recognition and measurement
Financial liabilities are recognized when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognized initially at fair value plus any directly attributable transaction costs, such as loan processing fees and issue expenses.
Subsequent measurement - at amortised cost
After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are de recognised, and through the amortization process.
De recognition
A financial liability is de recognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
IX. Income Taxes
Income tax expense is comprised of current and deferred taxes. Current and deferred tax is recognized in net income except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.
Current income taxes for the current period, including any adjustments to tax payable in respect of previous years, are recognized and measured at the amount expected to be recovered from or payable to the taxation authorities based on the tax rates that are enacted or substantively enacted by the end of the reporting period.
Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using the tax rates that are expected to apply in the period in which the deferred tax asset or liability is expected to settle, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and reduced accordingly to the extent that it is no longer probable that they can be utilized.
In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the companyâs gross total income is subject to the deduction during the tax holiday period.
Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent that it has become reasonably certain, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax assets and liabilities are offset when there is legally enforceable right of offset current tax assets and liabilities when the deferred tax balances relate to the same taxation authority. Current tax asset and liabilities are offset where the entity has legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
X. Provisions , Contingent Liabilities and Contingent Assets Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense and is recorded over the estimated time period until settlement of the obligation. Provisions are reviewed and adjusted, when required, to reflect the current best estimate at the end of each reporting period.
The Company recognizes decommissioning provisions in the period in which a legal or constructive obligation arises. A corresponding decommissioning cost is added to the carrying amount of the associated property, plant and equipment, and it is depreciated over the estimated useful life of the asset.
A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under contract. The provision is measured at the present value of the lower of expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the company recognizes any impairment loss on the assets associated with that contract.
Liquidated Damages / Penalty as per the contracts / Additional Contract Claims / Counter Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.
Contingent Liabilities
Contingent liability is disclosed in case of
- A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;
- A present obligation arising from past events, when no reliable estimate is possible;
- A possible obligation arising from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.
Contingent Assets
Contingent assets are not recognized but disclosed in the financial statements when as inflow of economic benefits is probable
XI. Fair Value Measurements
Company uses the following hierarchy when determining fair values:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and,
Level 3 - Inputs for the asset or liability that are not based on observable market data.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting dates. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an armâs length basis. The fair value for these instruments is determined using Level 1 inputs.
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is fair valued using level 2 inputs.
If one or more of the significant inputs is not based on observable market data, the instrument is fair valued using Level 3 inputs. Specific valuation techniques used to value financial instruments include:
- Quoted market prices or dealer quotes for similar instruments;
- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;
- The fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting dates, with the resulting value discounted back to present value;
- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
XII. Revenue Recognition
Revenue is recognized and measured at the fair value of the consideration received or receivable, to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
The company collects GST, service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. The following specific recognition criteria must also be met before revenue is recognized:
Sale of Goods
Revenue from the sale of goods are recognized when there is persuasive evidence, usually in the form of an executed sales agreement at the time of delivery of the goods to customer, indicating that there has been a transfer of risks and rewards to the customer, no further work or processing is required, the quantity and quality of the goods has been determined, the price is considered fixed and generally title has passed.
Insurance Claims
Insurance claims are recognized on acceptance / receipt of the claim.
Interest
Revenue is recognized as the interest accrues, using the effective interest method. This is the method of calculating the amortized cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Dividends
Dividends are recognised in profit or loss only when the right to receive payment is established.
XIII. Foreign Currency Transactions
Transactions in foreign currencies are translated to the functional currency of the company, at exchange rates in effect at the transaction date.
At each reporting date monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate in effect at the date of the statement of financial position.
The translation for other non-monetary assets is not updated from historical exchange rates unless they are carried at fair value.
XIV. Investments
Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. Long term investments are stated at cost and provision for diminution is made if the decline in value is other than temporary in nature. Current investments are stated at lower of cost and fair value determined on the basis of each category of investments.
XV. Gratuity
The Company has made a provision for gratuity to its employees. Gratuity is a defined benefit retirement plan covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeesâ salary and the tenure of employment.
XVI.Related Party Disclosures
The Company furnishes the details of Related Party Disclosures as required by Companies Act 2013 and Indian Accounting Standard (IND AS)- 24.
XIX. Earnings per Share
Basic earnings per share are calculated by dividing:
- The profit attributable to owners of the company
- By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares. Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
- The after income tax effect of interest and other financing costs associated with dilutive potential equity shares
- The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
XX. Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise stated.
Mar 31, 2016
A. SIGNIFICANT ACCOUNTING POLICIES:
1. General:
- These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, exception for certain tangible assets which are being carried at revalued amounts. Pursuant to Section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rule,2014,till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act 1956, shall continue to apply. Consequently these financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211(3C) of Companies Act , 1956 [Companies(Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act ,2013.
All the assets and liabilities have been classified as current and noncurrent as per the companiesâ normal operating cycle and other criteria set out in schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the company has ascertained its operating cycle to be 12 months for the purpose of current - noncurrent classification of assets and liabilities.
- Use of Estimates
The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of income and expenses during the period.
2. Cash and Cash Equivalents
Cash comprises Cash on hand and Demand Deposits with Banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated.
3. Tangible and Intangible Assets
i) Tangible Fixed Assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation and impairment, if any. The cost of fixed assets includes taxes (other than those subsequently recoverable from tax authorities), duties, freight and other directly attributable costs related to the acquisition or construction of the respective assets. Direct costs are capitalized until fixed assets are ready for use.
ii) Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any. Profit or Loss on disposal of intangible assets is recognized in the Statement of Profit and Loss.
Product development Expenditure is written off over a period of 10 years. Products which are considered as redundant due to Technological advancement would be written off immediately.
iii) Capital work-in-progress
Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
4. Depreciation and Amortization:
I. Effective 1st April, 2014, Company depreciates the Fixed Assets over the useful life in the manner prescribed in Schedule II of The Companies Act, 2013 as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of The Companies Act 1956.
II. Depreciation for additions to Fixed Assets of the Company is provided as per Schedule II of the Companies Act, 2013 on pro-rata basis.
5. Revenue Recognition:
(i) The company follows the mercantile system of accounting and recognize income and expenditure on accrual basis.
(ii) Revenue is not recognized on the grounds of prudence, until realized in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.
6. Foreign Exchange Transactions:
Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of transactions.
a) Monetary items denominated in foreign currencies at the year and are restated at year end rates.
b) Non-monetary foreign currency items are carried at cost.
c) In respect of foreign operations, which are non-integral operations ,all assets and liabilities, other monetary and non-monetary, are translated at closing rate, which all income and expenses are translated at average rate for the year. The resulting exchange differences are included in the Profit and Loss Account.
7. Investments
Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. Long term investments are stated at cost and provision for diminution is made if the decline in value is other than temporary in nature. Current investments are stated at lower of cost and fair value determined on the basis of each category of investments
Cost of overseas investment comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment.
8. Gratuity:
The Company has made a provision for gratuity to its employees. Gratuity is a defined benefit retirement plan covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeesâ salary and the tenure of employment.
9. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as required by Companies Act 2013 and Accounting Standard - 18.
10. Earnings per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.
11. Taxes on Income
To provide Current tax as the amount of tax payable in respect of taxable income for the period, measured using the applicable tax rates and tax laws.
To provide deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence, measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Not to recognize Deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.
12. Provisions, Contingent Liabilities and Contingent Assets
The company creates the provisions where there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made for the amount of the obligation. A disclosure for contingent liability will be made when there is a possible obligation or present obligation that may, but probably, will not required the outflow of resources. Where, there is a possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provisions or disclosures will be made.
Mar 31, 2015
1. General:
- These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis, exception for certain tangible assets
which are being carried at revalued amounts. Pursuant to Section 133 of
the Companies Act,2013 read with Rule 7 of the Companies (Accounts)
Rule,2014,till the standards of accounting or any addendum thereto are
prescribed by Central Government in consultation and recommendation of
the National Financial Reporting Authority, the existing Accounting
Standards notified under the Companies Act 1956, shall continue to
apply. Consequently these financial statements have been prepared to
comply in all material aspects with the accounting standards notified
under section 211(3C) of Companies Act , 1956 [Companies(Accounting
Standards) Rules, 2006, as amended] and other relevant provisions of
the Companies Act ,2013.
All the assets and liabilities have been classified as current and
noncurrent as per the companies' normal operating cycle and other
criteria set out in schedule III to the Companies Act, 2013. Based on
the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cash equivalent, the
company has ascertained its operating cycle to be 12 months for the
purpose of current - non current classification of assets and
liabilities.
- Use of Estimates
The preparation of Financial Statements in conformity with Generally
Accepted Accounting Principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosures of contingent liabilities on
the date of financial statements and reported amounts of income and
expenses during the period.
2. Cash and Cash Equivalents
Cash comprises Cash on hand and Demand Deposits with Banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby Profit tax is
adjusted for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments. The
cash flows from operating, investing and financing activities of the
Company are segregated.
3. Tangible and Intangible Assets
i) Tangible Fixed Assets
Tangible fixed assets are carried at the cost of acquisition or
construction, less accumulated depreciation and impairment, if any. The
cost of fixed assets includes taxes (other than those subsequently
recoverable from tax authorities), duties, freight and other directly
attributable costs related to the acquisition or construction of the
respective assets. Direct costs are capitalized until fixed assets are
ready for use.
ii) Intangible Assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment loss, if any. Profit or Loss on disposal of intangible assets
is recognized in the Statement of Profit and Loss.
Product development Expenditure is written off over a period of 10
years. Products which are considered as redundant due to Technological
advancement would be written off immediately.
iii) Capital work-in-progress
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
4. Depreciation and Amortization:
i). Effective 1st April, 2014, Company depreciates the Fixed Assets
over the useful life in the manner prescribed in Schedule II of The
Companies Act, 2013 as against the earlier practice of depreciating at
the rates prescribed in Schedule XIV of The Companies Act 1956.
ii). Depreciation for additions to Fixed Assets of the Company is
provided as per Schedule II of the Companies Act, 2013 on pro-rata
basis.
iii). Individual assets acquired for less than Rs.5,000/-are entirely
depreciated in the year of acquisition. Leasehold improvements are
written off over the lower of, the remaining primary period of lease or
the life of the asset.
iv). The carrying value of Fixed Assets whose life has completed as per
Schedule II of The Companies Act, 2013 is transferred to Retained
earnings amounting to Rs. 18,14,592/-.
5. Revenue Recognition:
i). The company follows the mercantile system of accounting and
recognise income and expenditure on accrual basis
ii). Revenue is not recognised on the grounds of prudence until it is
realised in respect of liquidated damages, delayed payment as recovery
of liquidated amounts are not certain
6. Foreign Exchange Transactions:
Transactions denominated in foreign currencies are recorded at the rate
prevailing on the date of transactions.
i) Monetary items denominated in foreign currencies at the year and are
restated at year end rates.
ii) Non-monetary foreign currency items are carried at cost.
iii) In respect of foreign operations, which are non-integral
operations ,all assets and liabilities, other monetary and
non-monetary, are translated at closing rate, which all income and
expenses are translated at average rate for the year. The resulting
exchange differences are included in the Profit and Loss Account.
7. Investments
Investments are classified into current and long-term investments.
Investments that are readily realizable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments.
Long term investments are stated at cost and provision for diminution
is made if the decline in value is other than temporary in nature.
Current investments are stated at lower of cost and fair value
determined on the basis of each category of investments.
Cost of overseas investment comprises the Indian Rupee value of the
consideration paid for the investment translated at the exchange rate
prevalent at the date of investment.
8. Gratuity:
The Company has made a provision for gratuity to its employees.
Gratuity is a defined benefit retirement plan covering eligible
employees. In accordance with the Payment of Gratuity Act, 1972, the
gratuity plan provides a lump sum payment to vested employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employees' salary and the tenure of
employment.
9. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as given
in Para 23 and 26 as required by AS-18.
10. Earnings per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net Profit after tax for the year by weighted average number of
equity shares outstanding during the year.
11. Taxes on Income
To provide Current tax as the amount of tax payable in respect of
taxable income for the period, measured using the applicable tax rates
and tax laws.
To provide deferred tax on timing differences between taxable income
and accounting income subject to consideration of prudence, measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Not to recognize
Deferred tax assets on unabsorbed depreciation and carry forward of
losses unless there is virtual certainty that there will be sufficient
future taxable income available to realize such assets.
12. Provisions, Contingent Liabilities and Contingent Assets
The company creates the provisions where there is a present obligation
as a result of past event that probably requires an outflow of resources
and a reliable estimate can be made for the amount of the obligation. A
disclosure for contingent liability will be made when there is a
possible obligation or present obligation that may, but probably, will
not required the outflow of resources. Where, there is a possible
obligation or present obligation in respect of which the likelihood of
outflow of resources is remote, no provisions or disclosures will be
made.
Mar 31, 2014
A) General:
(i) The financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles ("GAAP") under the
historical cost convention on accrual basis. GAAP comprises mandatory
accounting standards as specified in the Companies (Accounting
Standards) Rules, 2006 and the relevant provisions of the Indian
Companies Act, 1956. Accounting policies have been consistently applied
except where a newly issued accounting standard is initially adopted or
a revision to an existing accounting adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The management evaluates all recently issued or
revised accounting standards on an ongoing basis
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
(iii) Use of Estimates
The preparation of Financial Statements in conformity with Generally
Accepted Accounting Principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosures of contingent liabilities on
the date of financial statements and reported amounts of income and
expenses during the period.
b) Cash and Cash Equivalents
Cash comprises Cash on hand and Demand Deposits with Banks. Cash
equivalents are short-term balances, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
c) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and financing
activities of the Company are segregated.
d) Tangible and Intangible Assets
i) Tangible Fixed Assets
Tangible fixed assets are carried at the cost of acquisition or
construction, less accumulated depreciation and impairment, if any. The
cost of fixed assets includes taxes (other than those subsequently
recoverable from tax authorities), duties, freight and other directly
attributable costs related to the acquisition or construction of the
respective assets. Direct costs are capitalized until fixed assets are
ready for use.
ii) Intangible Assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment loss, if any. Profit or Loss on disposal of intangible
assets is recognized in the Statement of Profit and Loss.
Product development Expenditure is written off over a period of 10
years. Products which are considered as redundant due to Technological
advancement would be written off immediately.
iii) Depreciation and Amortization:
Depreciation is provided on straight line method on pro-rata basis and
at the rates and manner specified in the Schedule XIV of the Companies
Act, 1956.
Preliminary Expenses are amortized over the period of 10 years.
Depreciation on Technical Knowhow not created because revenues relating
to the same not generated during the financial year.
e) Revenue Recognition:
(i) The company follows the mercantile system of accounting and
recognise income and expenditure on accrual basis.
(ii) Revenue is not recognized on the grounds of prudence, until
realized in respect of liquidated damages, delayed payments as recovery
of the amounts are not certain.
f) Investments
Investments are classified into current and long-term investments.
Investments that are readily realizable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments.
Long term investments are stated at cost and provision for diminution
is made if the decline in value is other than temporary in nature.
Current investments are stated at lower of cost and fair value
determined on the basis of each category of investments.
g) Gratuity:
The Company has made a provision for gratuity to its employees.
Gratuity is a defined benefit retirement plan covering eligible
employees. In accordance with the Payment of Gratuity Act, 1972, the
gratuity plan provides a lump sum payment to vested employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employees'' salary and the tenure of
employment.
h) Earnings per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
i) Taxes on Income
To provide Current tax as the amount of tax payable in respect of
taxable income for the period, measured using the applicable tax rates
and tax laws.
To provide deferred tax on timing differences between taxable income
and accounting income subject to consideration of prudence, measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Not to recognize
Deferred tax assets on unabsorbed depreciation and carry forward of
losses unless there is virtual certainty that there will be sufficient
future taxable income available to realize such assets.
j) Impairment of Assets:
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss, if any charged to
the Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a charge in the
estimate of recoverable amount.
k) Leases
Lease rental in respect of operating lease arrangements are charged to
expense in the Statement of Profit and Loss on a straight line basis as
per the term of the related agreement.
Other leases are operating leases, and the leased assets are not
recognized on the Company''s balance sheet. Payments made under
operating leases are recognized in the statement of profit and loss on
a straight-line basis over the term of the lease.
l) Research and development
Expenditure on internal research activities undertaken is recognized as
expense in the statement of profit and loss when incurred.
m) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are neither recognized nor disclosed in the
financial statements.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2013
General :
(i) These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
Revenue Recognition :
(i) The Company follows the mercantile system of Accounting and
recognizes income and expenditure on accrual basis.
(ii) Revenue is not recognized on the grounds of prudence, until
realized in respect of liquidated damages, delayed payments as recovery
of the amounts are not certain.
Fixed Assets :
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition of fixed assets is inclusive of freight, duties, taxes
and incidental expenses thereto.
(ii) Capital Expenditure with respect to Research and Development
Activities is capitalized from the date of completion and ready for
use.
Depreciation and Amortization:
(i) Depreciation is provided on straight line method on pro-rata basis
and at the rates and manner specified in the Schedule XIV of the
Companies Act, 1956.
(ii) Preliminary Expenses are amortized over the period of 10 years.
(iii) Depreciation on Technical Knowhow not created because revenues
relating to the same not generated during the financial year.
Research and Development Expenses :
Costs related to internal research and development programs are
expensed as incurred.
Inventories:
Inventories are valued at cost or market price whichever is lower.
Impairment:
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. 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-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
Reversal of impairment loss is recognized immediately as income in the
Profit and Loss account.
Gratuity :
The Company has made provision for the gratuity to its employees as per
the provisions of the Payment of Gratuity Act, 1972.
Mar 31, 2010
General :
(i) These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
Revenue Recognition :
(i) The Company follows the mercantile system of Accounting and
recognizes income and expenditure on accrual basis.
(ii) Revenue is not recognized on the grounds of prudence, until
realized in respect of liquidated damages, delayed payments as recovery
of the amounts are not certain.
Fixed Assets :
(a) Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition of fixed assets is inclusive of freight, duties, taxes
and incidental expenses thereto.
(b) Capital Expenditure with respect to Research and Development
Activities is capitalized from the date of completion and ready for
use.
(c) Preclinical Facility (Animal House) at SEZ Site at Pregnapur,
Gajwel Mandal, Andhra Pradesh is capitalized during the year and
balance lying in CWIP account reflects work in progress costs
associated the acquisition, installation and/or construction of the
Canine facilities for Bio Tech Plant. When the project is completed
and/or the asset has been identified and placed in service, this will
be capitalized and transferred to an asset account for depreciation.
Depreciation and Amortization :
(i) Depreciation is provided on straight line method on pro-rata basis
and at the rates and manner specified in the Schedule XIV of the
Companies Act, 1956.
(ii) Preliminary Expenses are amortized over the period of 10 years.
Research and Development Expenses :
Costs related to internal research and development programs are
expensed as incurred.
Borrowing Costs :
(i) Borrowing costs for the Borrowing costs attributable to the
acquisition or construction of qualifying assets are capitalized 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.
Inventories :
Inventories are valued at cost or market price which ever is lower.
Taxation :
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Company has three
different tax structures viz. SEZ Developer, SEZ Unit and DSIR
Registered R&D Unit. Tax will be computed for each division and
consolidated.
Deferred tax asset and liability is recognized for future tax
consequences attributable to the timing differences that result between
the profit offered for income tax and the profit as per the financial
statements. Deferred tax asset & liability are measured as per the tax
rates/laws that have been enacted or substantively enacted by the
Balance Sheet date.
Impairment :
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. 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 assetÃs 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-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
Gratuity :
The Company has made provision for the gratuity to its employees as per
the provisions of the Payment of Gratuity Act, 1972