Mar 31, 2015
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention . The accounting policies adopted in the preparation
of the financial statements are consistent with those followed in the
previous year .
1.2Use of estimates
The preparation of the financial statements are in conformity with
Indian GAAP which requires the Management to make estimates and
assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the
estimates used in preparation of the financial statements are prudent
and reasonable.
1.3Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises of 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 are subject to
insignificant risk of changes in value.
1.4Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and 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 based on the available information.
1.5 Depreciation and amortisation
Depreciation has been provided on the written down method as per the
rates prescribed in Part 'C' of Schedule II of the Companies Act, 2013.
Intangible assets are amortised over their estimated useful life as
follows:
Intangibles  3  6 years.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
1.6Revenue recognition
Income from services
Revenues from contracts priced on a time and material basis are
recognised when services are rendered and related costs are incurred.
1.7Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for on receipt basis.
1.8Tangible Fixed Assets
Fixed assets, are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
The Company has not revalued its assets.
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.
1.9 Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
1.10 Foreign currency transactions and translations
Transactions in foreign currencies are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
1.11 Investments
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any. Investment properties
are capitalised and depreciated (where applicable) in accordance with
the policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets.
1.12 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund.
The Company's contribution to provident fund is considered as defined
contribution plan and is charged as an expense as they fall due based
on the amount of contribution required to be made.
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service. The cost of such
compensated absences is accounted as under :(a) in case of accumulated
compensated absences, when employees render the services that increase
their entitlement of future compensated absences; and(b) in case of
non-accumulating compensated absences, when the absences occur.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are not allocable to
segments on reasonable basis have been included under "unallocated
revenue / expenses / assets / liabilities".
1.14. Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year.
Diluted earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive
potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares been
actually issued at fair value (i.e. average market value of the
outstanding shares). Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share splits /
reverse share splits and bonus shares, as appropriate.
1.15 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Minimum Alternate Tax (MAT) is paid in accordance with the
tax laws, which gives future economic benefits in the form of
adjustment to future income tax liability, is considered as an asset if
there is convincing evidence that the Company will pay normal income
tax. Accordingly, MAT is recognised as an asset in the Balance Sheet
when it is probable that future economic benefit associated with it
will flow to the Company.Deferred tax is recognised on timing
differences, being the differences between the taxable income and the
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax is measured
using the tax rates and the tax laws enacted or substantially enacted
as at the reporting date. Deferred tax liabilities are recognised for
all timing differences. Deferred tax assets in respect of unabsorbed
depreciation and carry forward of losses are recognised only if there
is virtual certainty that there will be sufficient future taxable
income available to realise such assets. Deferred tax assets are
recognised for timing differences of other items only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. Deferred tax
assets and liabilities are offset if such items relate to taxes on
income levied by the same governing tax laws and the Company has a
legally enforceable right for such set off. Deferred tax assets are
reviewed at each Balance Sheet date for their realisability. Current
and deferred tax relating to items directly recognised in equity are
recognised in equity and not in the Statement of Profit and Loss.
Current and deferred tax relating to items directly recognised in
equity and not in the Statement of Profit and Loss.
1.16 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.17 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.18 Derivative contracts
The Company enters into derivative contracts in the nature of foreign
currency swaps, currency options, forward contracts. Futures derivative
contracts are marked-to-market and Profit & Losses are recognised in
the Statement of Profit and Loss. Option transaction are recognised at
cost price till the account is settled.
1.19 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying services are received and are accounted as and
when there is no uncertainty in availing / utilising the credits.
1.24 Employee benefit plans
Defined contribution plans
The Company makes Provident Fund contribution for qualifying employees.
Under the Schemes, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. The Company
recognised Rs.58017/- (Year ended 31 March, 2015) for Provident Fund
contributions and Rs.50660/- (Year ended 31 March, 2014) for
contributions in the Statement of Profit and Loss. The contributions
payable to these plans by the Company are at the rates specified in the
rules of the schemes.
Mar 31, 2013
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention . The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year .
1.2 Use of estimates
The preparation of the financial statements are in conformity with
Indian GAAP which requires the Management to make estimates and
assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the
estimates used in preparation of the financial statements are prudent
and reasonable. Future results could differ due to these estimates and
the differences between the actual results and the estimates are
recognised in the periods in which the results are known /
materialise..
1.3 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises of 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.
1.4 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and 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 based on the available information.
1.5 Depreciation and amortisation
Depreciation has been provided on the written down method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 .
Intangible assets are amortised over their estimated useful life as
follows:
Intangibles  3  5 years (1-2 years remaining as at the Balance Sheet
date)
Amortisation of Product marketing rights over 15 years is based on the
term of the marketing right acquired and the economic benefits that are
expected to accrue to the Company over such period.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
1.6 Revenue recognition
Income from services
Revenues from contracts priced on a time and material basis are
recognised when services are rendered and related costs are incurred.
1.7 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for on receipt basis.
1.8 Tangible Fixed Assets
Fixed assets, and are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
The Company has not revalued its assets.
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.
1.9 Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
1.10 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction. Treatment of
exchange differences
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
ÂForeign currency translation reserve until disposal / recovery of the
net investment.The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalised
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortised on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortised balance is carried in the Balance Sheet as ÂForeign
currency monetary item translation difference account net of the tax
effect thereon. Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
1.11 Investments
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any. Investment properties
are capitalised and depreciated (where applicable) in accordance with
the policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets.
1.12 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, compensated absences, long service awards and post-employment
medical benefits. Defined contribution plans
The CompanyÂs contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made. Defined benefit plans
For defined benefit plans in the form of gratuity fund and
post-employment medical benefits, the cost of providing benefits is
determined using the Projected Unit Credit method, with actuarial
valuations being carried out at each Balance Sheet date. Actuarial
gains and losses are recognised in the Statement of Profit and Loss in
the period in which they occur. Past service cost is recognised
immediately to the extent that the benefits are already vested and
otherwise is amortised on a straight-line basis over the average period
until the benefits become vested. The retirement benefit obligation
recognised in the Balance Sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised past service
cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service. The cost of such
compensated absences is accounted as under :(a) in case of accumulated
compensated absences, when employees render the services that increase
their entitlement of future compensated absences; and(b) in case of
non-accumulating compensated absences, when the absences occur.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the Balance Sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled. Long Service Awards are recognised as a liability at
the present value of the defined benefit obligation as at the Balance
Sheet date.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are not allocable to
segments on reasonable basis have been included under Âunallocated
revenue / expenses / assets / liabilitiesÂ.
1.14 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares been
actually issued at fair value (i.e. average market value of the
outstanding shares). Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share splits /
reverse share splits and bonus shares, as appropriate.
1.15 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with it will flow
to the Company.Deferred tax is recognised on timing differences, being
the differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability. Current and deferred tax relating to
items directly recognised in equity are recognised in equity and not in
the Statement of Profit and Loss.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
1.16 Research expenses
Revenue expenditure pertaining to research is charged to the Statement
of Profit and Loss. Value addition costs of products are also charged
to the Statement of Profit and Loss unless a productÂs technological
feasibility has been established, in which case such expenditure is
capitalised. The amount capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and consistent basis
to creating, producing and making the asset ready for its intended use.
Fixed assets utilised for research and development are capitalised and
depreciated in accordance with the policies stated for Tangible Fixed
Assets and Intangible Assets.
1.17 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.18 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.19 Derivative contracts
The Company enters into derivative contracts in the nature of foreign
currency swaps, currency options, forward contracts with an intention
to hedge its existing assets and liabilities, firm commitments and
highly probable transactions. Derivative contracts which are closely
linked to the existing assets and liabilities are accounted as per the
policy stated for Foreign Currency Transactions and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting. All other derivative contracts are
marked-to-market and losses are recognised in the Statement of Profit
and Loss. Gains arising on the same are not recognised, until
realised, on grounds of prudence.
1.20 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying services are received and are accounted and when
there is no uncertainty in availing / utilising the credits.
Mar 31, 2012
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention . The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year .
1.2. Use of estimates
The preparation of the financial statements are in conformity with
Indian GAAP which requires the Management to make estimates and
assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the
estimates used in preparation of the financial statements are prudent
and reasonable. Future results could differ due to these estimates and
the differences between the actual results and the estimates are
recognised in the periods in which the results are known /
materialise..
1.3 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises of 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.
1.4. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and 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 based on the available information.
1.5. Depreciation and amortisation
Depreciation has been provided on the written down method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 .
Intangible assets are amortised over their estimated useful life as
follows:
Intangibles à 3 à 5 years (1-2 years remaining as at the Balance Sheet
date)
Amortisation of Product marketing rights over 15 years is based on the
term of the marketing right acquired and the economic benefits that are
expected to accrue to the Company over such period.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
1.6. Revenue recognition
Income from services
Revenues from contracts priced on a time and material basis are
recognised when services are rendered and related costs are incurred.
1.7. Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for on receipt basis.
1.8. Tangible Fixed Assets
Fixed assets, and are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Machinery spares which
can be used only in connection with an item of fixed asset and whose
use is expected to be irregular are capitalised and depreciated over
the useful life of the principal item of the relevant assets.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
The Company has not revalued its assets.
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet. 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.
1.9. Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
1.10. Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction. Treatment of
exchange differences
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
"Foreign currency translation reserve" until disposal / recovery of the
net investment.The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalised
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortised on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortised balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon. Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
1.11. Investments
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any. Investment properties
are capitalised and depreciated (where applicable) in accordance with
the policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets.
1.12. Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, compensated absences, long service awards
and post-employment medical benefits.
Defined contribution plans
The Company's contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund and
post-employment medical benefits, the cost of providing benefits is
determined using the Projected Unit Credit method, with actuarial
valuations being carried out at each Balance Sheet date. Actuarial
gains and losses are recognised in the Statement of Profit and Loss in
the period in which they occur. Past service cost is recognised
immediately to the extent that the benefits are already vested and
otherwise is amortised on a straight-line basis over the average period
until the benefits become vested. The retirement benefit obligation
recognised in the Balance Sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised past service
cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service. The cost of such
compensated absences is accounted as under :(a) in case of accumulated
compensated absences, when employees render the services that increase
their entitlement of future compensated absences; and(b) in case of
non-accumulating compensated absences, when the absences occur.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the Balance Sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled. Long Service Awards are recognised as a liability at
the present value of the defined benefit obligation as at the Balance
Sheet date.
1.13. Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment. Inter-segment revenue is accounted on the
basis of transactions which are primarily determined based on market /
fair value factors. Revenue, expenses, assets and liabilities which
relate to the Company as a whole and are not allocable to segments on
reasonable basis have been included under "unallocated revenue /
expenses / assets / liabilities".
1.14. Earnings Per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
1.15. Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with it will flow
to the Company.Deferred tax is recognised on timing differences, being
the differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability. Current and deferred tax relating to
items directly recognised in equity are recognised in equity and not in
the Statement of Profit and Loss.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
1.16. Research and development expenses
Revenue expenditure pertaining to research is charged to the Statement
of Profit and Loss. Development costs of products are also charged to
the Statement of Profit and Loss unless a product's technological
feasibility has been established, in which case such expenditure is
capitalised. The amount capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and consistent basis
to creating, producing and making the asset ready for its intended use.
Fixed assets utilised for research and development are capitalised and
depreciated in accordance with the policies stated for Tangible Fixed
Assets and Intangible Assets.
1.17. Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.18. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.19. Derivative contracts
The Company enters into derivative contracts in the nature of foreign
currency swaps, currency options, forward contracts with an intention
to hedge its existing assets and liabilities, firm commitments and
highly probable transactions. Derivative contracts which are closely
linked to the existing assets and liabilities are accounted as per the
policy stated for Foreign Currency Transactions and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting. All other derivative contracts are
marked-to-market and losses are recognised in the Statement of Profit
and Loss. Gains arising on the same are not recognised, until
realised, on grounds of prudence.
1.20. Insurance claims
Insurance claims are accounted to the extent that there is no
uncertainty in receiving the claims.
1.21. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying services are received and are accounted and when
there is no uncertainty in availing / utilising the credits.
Mar 31, 2010
- GENERAL
The accompanying financial statements is in accordance with Indian
Generally Accepted Accounting Principles (GAAP) and the provisions of
the Companies Act, 1956 (The Act).
- REVENUE RECOGNITION
Income is accounted for on Accrual Basis. In appropriate circumstances
Income is recognised when no significant uncertainty as to
measurability or collectability exist. However, Dividend Income Is
accounted for on receipt basis.
- EXPENSES
The Company provides for all expenses on Accrual Basis. Material known
liabilities for expenses are provided for on the basis of available
information / estimates.
- FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses where applicable. Cost comprises purchase price and
all direct/indirect costs incurred to bring the asset to its working
condition for the intended use.
- DEPRECIATION
The Company provides depreciation on Written Down Value method on
pro-rata basis at the rate specified in Schedule XIV to the Companies
Act, 1956.
- INVENTORIES
Stocks are valued at Cost or Market Value whichever is lower.
- INVESTMENTS
Investments are valued at Cost. Diminution in value is provided for
where the management is of the opinion that the diminution is of
permanent nature.
- RETIREMENT BENEFIT
Companys contribution to Provident Fund & Family Pension Fund are
statutorily deposited with the Government and charged to Profit & Loss
A/c. For eligible employees year end liability on account of Gratuity
under the payment of Gratuity Act 1972 is provided for on accrual basis
as at Balance Sheet date.
- INCOME TAX
Income-tax have been computed using the tax effect accounting method,
where taxes are accrued in the same period as the related revenue and
expenses.
- DEFERRED TAXATION
Deferred Tax is recognized on timing differences between the accounting
income and the taxable income for the year, and quantified using the
tax rates and laws enacted as on the Balance Sheet Date. Deferred tax
assets relating to unabsorbed depreciation/business losses are
recognized and carried forward to the extent there is virtual certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. The deferred tax account is
used for reversing timing difference as and when crystallized.
- EXCHANGE TRANSACTIONS
Exchange transactions have been recorded to coincide with transation
obligation within the financial year.
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