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Accounting Policies of Span Divergent Ltd. Company
Mar 31, 2025
1 Corporate information
Span Divergent Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 2013. Its shares are listed on Bombay Stock Exchange. The Company has sold its In-Vitro Diagnostics Business Undertaking on March 05, 2015 and has invested in different businesses through various subsidiaries.
2. Statement of significant accounting policies2.1 Basis of preparation
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
2.2 Summary of significant accounting policies
(a) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
(b) Functional and presentation currency
The financial statements are presented in INR which is also the Companyâs functional currency.
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(d) Revenue recognition
a. The Company recognise revenue on the sale of products when risks and rewards of the ownership are transferred to the customer. Sales are accounted net of amount recovered towards, sales tax and sales returns.
b. Sales returns are accounted on actual receipt of return goods / settlement of claims.
c. Interest income is recognised on pro-rate basis.
d. Income from mutual funds is recognised when the Companyâs right to receive the payment is established, and unit holdersâ right to receive payment is established.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period/year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT)
Minimum Alternative T ax (âMATâ) under the provisions of the Income-tax Act, 1961 is recognised as current tax in the statement of profit and loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
(f) Property, plant and equipment
Under the previous GAAP (Indian GAAP), Property, Plant and Equipment were carried in the balance sheet at cost of acquisition. The Company has elected to regard those values of assets as deemed cost at the date of the acquisition since they were broadly comparable to fair value. The Company has also determined that cost of acquisition or construction does not differ materially from fair valuation as at April 01, 2016 (date of transition to Ind AS).
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance or extends its estimated useful life. All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Depreciation is calculated on a Written down value over the estimated useful lives as per Schedule 2 of The Companies Act, 2013
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial period/year end and adjusted prospectively, if appropriate.
Intangible assets are measured at cost. Lump sum fees for technical know-how is amortised over the period of agreement or as per managementâs best estimate of useful life but not exceeding 10 years.
(h) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) fair value less costs of disposal and its value in use. Recoverable amount 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. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companyâs CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods/ years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
(j) Provisions General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
a. Retirement Benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
The Company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund.
The cost of providing benefits under the defined benefit plan is determined based on actuarial valuation.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
- The date of the plan amendment or curtailment, and
- The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss.
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income
The Company treats accumulated leave, as a long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on an actuarial valuation using the projected unit credit method at the period-end/ year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the entire liability in respect of leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement beyond 12 months after the reporting date.
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
For purposes of subsequent measurement, a âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
In respect of equity investments, when an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in subsidiaries and associates either:
(a) at cost; or
(b) in accordance with Ind AS 109.
If a first-time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure that investment at one of the following amounts in its separate opening Ind AS Balance Sheet:
(a) cost determined in accordance with Ind AS 27; or
(b) deemed cost. The deemed cost of such an investment shall be its:
(i) fair value at the entityâs date of transition to Ind AS in its separate financial statements; or
(ii) previous GAAP carrying amount at that date.
A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary or associate that it elects to measure using a deemed cost.
Since the company is a first-time adopter it has measured its investment in subsidiary and associate at deemed cost in accordance with Ind AS 27 by taking previous GAAP carrying amount.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
a) the rights to receive cash flows from the asset have expired, or
b) the Company has transferred its rights to receive cash flows from the asset, and
i. the Company has transferred substantially all the risks and rewards of the asset, or
ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18
c) Loan commitments which are not measured as at FVTPL
The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
? All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
? Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head âother expensesâ in the P&L. The balance sheet presentation for various financial instruments is described below:
? Financial assets measured as at amortised cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
? Loan commitments and financial guarantee contracts: ECL is presented as a provision in the balance sheet, i.e. as a liability.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings, financial guarantee contracts.
The measurement of financial liabilities depends on their classification, as described below:
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings. For more information refer Note 14.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. 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 the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
(n) Segment Reporting
The Board of Directors assess the financial performance of the Company and make strategic decisions and has been identified as being the Chief Operating Decision Maker (CODM). Based on the internal reporting provided to the CODM, the Company has only one reportable segment i.e. the activities of head offices, Management services, hence no separate disclosures are required under Ind As 108
(o) Leases
Assets acquired on lease and assets given on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. The initial direct cost of lease is charged to Statement of Profit and Loss as and when incurred. Lease rental are charged to Statement of Profit and loss on accrual basis.
(p) Earnings per Share
The Basic earning per Share ("EPS") is computed by dividing the net profit/(loss) after tax for the year attributable to equity share holder by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit after tax for the period attributable to the equity shareholders of the Company by weighted average number of equity shares determined by assuming conversion on exercise of conversion rights for all potential dilutive securities.
(q) Additional regulatory information
(a) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year or The Company does not have any transactions with companies struck off.
(b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(c) The Company has not traded or invested in crypto currency or virtual currency during the year.
Mar 31, 2024
2.2 Summary of significant accounting policies
(a) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company
has identified twelve months as its operating cycle.
(b) Functional and presentation currency
The financial statements are presented in INR which is also the Companyâs functional currency.
(c) Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes
place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy as explained above.
(d) Revenue recognition
a. The Company recognise revenue on the sale of products when risks and rewards of the ownership are transferred to the customer. Sales are
accounted net of amount recovered towards, sales tax and sales returns.
b. Sales returns are accounted on actual receipt of return goods / settlement of claims.
c. Interest income is recognised on pro-rate basis.
d. Income from mutual funds is recognised when the Companyâs right to receive the payment is established, and unit holdersâ right to receive
payment is established.
(e) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company
operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in
equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period/year when the asset is realised or the liability
is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity).
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities
and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT)
Minimum Alternative Tax (âMATâ) under the provisions of the Income-tax Act, 1961 is recognised as current tax in the statement of profit and
loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when and to the extent there is convincing evidence
that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax
liability. MAT credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing
evidence no longer exists.
(f) Property, plant and equipment
Under the previous GAAP (Indian GAAP), Property, Plant and Equipment were carried in the balance sheet at cost of acquisition. The Company has
elected to regard those values of assets as deemed cost at the date of the acquisition since they were broadly comparable to fair value. The Company
has also determined that cost of acquisition or construction does not differ materially from fair valuation as at April 01, 2016 (date of transition to
Ind AS).
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and
accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition
for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance or extends its estimated useful life. All other expenses on existing property,
plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and
loss for the period during which such expenses are incurred.
Depreciation is calculated on a Written down value over the estimated useful lives as per Schedule 2 of The Companies Act, 2013
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial period/year end and
adjusted prospectively, if appropriate.
(g) Intangible Assets
Intangible assets are measured at cost. Lump sum fees for technical know-how is amortised over the period of agreement or as per managementâs
best estimate of useful life but not exceeding 10 years.
(h) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an
assetâs or cash-generating unitâs (CGU) fair value less costs of disposal and its value in use. Recoverable amount 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. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions
are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companyâs
CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods,
a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods
covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate
for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for
the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer
exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods/
years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is
treated as a revaluation increase.
(i) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they
occur.
Mar 31, 2015
I) Basis of Preparation of Financial Statements.
The Financial statements are prepared in accordance with the Generally
Accepted Accounting Principles in India, Accounting Standards notified
by the Companies (Accounting Standards) Rules 2006 which continues to
be applicable in respect of Section 133 of the Companies Act, 2013 read
with Rule 7 of the Companies (Accounts) Rules 2014 and relevant
provisions of the Companies Act, 2013.
The Company adopts the accrual concept in preparation of the accounts.
The preparation of accounts require the Management to make estimates
and assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) as of the date of the
accounts and the reported income and expenses during the period. Actual
results could differ from these estimates. The accounting year of the
Company is a period of 12 months commencing from April 1 to March 31.
ii) Use of Estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & other Accounting Policies
a. The Company recognies revenue on the sale of products when risks and
rewards of the ownership is transferred to the customer. Sales are
accounted net of amount recovered towards excise duty, sales tax and
sales returns.
b. Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c. Services are accounted for pro-rata over the period of contract.
d. Interest income is recognised on pro-rate basis. -
e. Dividend income is recognised when right to receive the dividend is
established.
iv) Tangible Assets & Depreciation
a) Tangible Assets are stated at cost of acquisition / construction,
cost of improvement and any attributable cost of bringing the asset to
its working condition for intended use or at revalued amounts wherever
such assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method as per useful life specified in
schedule II of the Companies Act, 2013.
v) Intangible Assets and Amortization:
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement or as per
management's best estimate of useful life but not exceeding 10 years.
SAP Software expenses are amortised over the period of five years.
vi) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying fixed assets are capitalised as part of the
cost of the assets upto the date the asset is put to use. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Statement of Profit and Loss in the year in which they are
incurred.
vii) Foreign Currency Transactions
(a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
(b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
(c) Monetary foreign currency items other than those covered by forward
contracts (i. e. receivable, payable, etc.) denominated in foreign
currency is reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
(d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits
a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits:
i. Defined Contribution Plans: The Company's Statutory Provident Fund,
Employees' Super-annuation Fund and Employee State Insurance Scheme are
defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and : Employee State Insurance
beyond its contribution.
ii. Defined Benefit Plan: The Employees' Group Gratuity Fund is the
Company's defined benefit plan for which Company has taken Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India. Gratuity expenses are recognized at the present value of the
amount payable determined using actuarial valuation techniques.
Actuarial gains and losses in respect of defined benefits are charged
to the Statement of Profit and Loss. From March 05,2015, on account of
transfer of In-lnvitro Division, fund balance with LIC is also
transferred to transfee Company. Hence, subsequent to March 05,2015,
the gratuity is unfunded.
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Taxation
Income Tax comprises of Current Tax and net changes in Deferred Tax
Assets or Liability during the period. Current Tax is determined as the
amount of tax payable in respect of taxable income for the period as
per the enacted Tax Regulations. Deferred Tax Assets and Liabilities
are recognized for the future tax consequences of timing differences
between the book profit and tax profit. Deferred Tax Assets and
Liabilities other than on carry forward losses and unabsorbed
depreciation under tax laws are recognized when it is reasonably
certain that there will be future taxable income. Deferred Tax Asset on
carryforward losses and unabsorbed depreciation, if any, are recognized
when it is virtually certain that there will be future taxable profit.
Deferred Tax Assets and liabilities are measured using substantively
enacted tax rates. The effect on Deferred Tax Assets and Liabilities of
a change in tax rates is recognized in the Statement of Profit & Loss
in the period of substantive enactment of the change .
Minimum Alternate Tax (MAT) paid in a year is charged to the Statement
of Profit and Loss as current tax. The Company recognizes the MAT
credit available as an asset only to the extent that there is
convincing evidence that the Company will pay the normal income tax
during the specified period i.e., period for which MAT credit is
allowed to be carried forward. In the year in which the Company
recognizes the MAT credit as an asset in accordance with the guidance
note on accounting for credit available in respect of Minimum
Alternative Tax under the Income Tax Act, 1961, the said asset is
created byway of credit to the Statement of Profit and Loss and shown
as "MAT Credit Entitlement.'' The Company reviews the "MAT
Credit Entitlement" asset at each reporting date and writes down the
asset to the extent the Company does not have convincing evidence that
it will pay normal tax during the specified period.
x) Valuation of stock
The mode of valuing closing stock is as under:
Inventory Type Mode of Valuation
Raw-Materials, Packing Materials & Other Materials At lower of cost or
net realizable value
Work-in-Process At lower of cost or net realizable value
Finished Goods/ Traded Goods for resale At lower of Cost or net
realizable value.
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
The cost is computed based on weighted average basis.
x) Leases
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases.
The initial direct cost of lease is charged to Statement of Profit and
Loss as and when incurred.
Lease rental are charged to Statement of Profit and loss on accrual
basis.
xi) Provision for Bad and Doubtful debts
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xii) Liquidated Damages
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of
liability/contingent liability is estimated on the basis of contracted
terms, facts of each case and to the extent of revenue recognised.
xiii) Impairment of Fixed Assets
Consideration is given at each Balance Sheet date to determine whether
there is any indication of carrying amount of the Company's fixed
assets. If there is any indication of impairment based on internal /
external factors, then asset's recoverable amount is estimated. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its estimated recoverable amount. The recoverable amount is
greater of the asset's net selling price and value in use. In assessing
the value in use, the estimated future cash flows are discounted to the
present value using the weighted average cost of capital. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
xiv) Investment
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xv) Research & Development
Revenue expenditure on research is charged as an expense in the year in
which it is incurred. Product development costs are expensed as
incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the company has an
intention and ability to complete and use or sell the product and the
costs can be measured reliably. Capital expenditure on research and
development is included as additions to fixed assets.
xvii) Provisions, contingent liabilities and contingent assets
Provisions:-
Provision is recognised when
a) The Company has a present obligation as a result of past event;
b) It is probable that an outflow of resources embodying economic
benefit is expected to settle the obligation,
c) A reliable estimate can be made for the amount of obligation.
d) Provision for warranty related costs are recognised when product is
sold. Provision is estimated based on historical experience and the
estimates are reviewed annually for any material changes in
assumptions.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date.
Contingent liabilitv:-
Contingent Liability is disclosed in case of
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation unless the probability of outflow of resources
is remote.
Contingent assets:-
Contingent assets are neither recognised nor disclosed.
Provisions, Contingent Liabilities are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimate.
xviii)Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/
(loss) 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 based on the
available information.
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.
xvii) Earnings per Share
Basic earnings per share is calculated by dividing the net profit after
tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares outstanding during
the period.
Diluted earnings per share is calculated by dividing the net profit
after tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares determined by
assuming conversion on exercise of conversion rights for all potential
dilutive securities
Mar 31, 2014
I) Basis of Preparation of Financial Statements :
The Financial statements are prepared in accordance with the Generally
Accepted Accounting Principles in India, Accounting Standards notified
by the Companies (Accounting Standards) Rules 2006, relevant provisions
of the Companies Act, 1956
The Company adopts the accrual concept in preparation of the accounts.
The preparation of accounts require the Management to make estimates
and assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) as of the date of the
accounts and the reported income and expenses during the period. Actual
results could differ from these estimates. The accounting year of the
Company is a period of 12 months commencing from April 1 to March 31.
ii) Use of Estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & other Accounting Policies
a. The Company recognises revenue on the sale of products when risks
and rewards of the ownership is transferred to the customer. Sales are
accounted net of amount recovered towards excise duty, sales tax and
sales returns.
b. Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c. Services are accounted for pro-rata over the period of contract.
d. Interest income is recognised on pro-rate basis.
e. Dividend income is recognised when right to receive the dividend is
established.
iv) Tangible Assets & Depreciation
a) Tangible Assets are stated at cost of acquisition / construction,
cost of improvement and any attributable cost of bringing the asset to
its working condition for intended use or at revalued amounts wherever
such assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method at the rates and in the manner
specified in schedule XIV of the Companies Act, 1956.
v) Intangible Assets and Amortization :
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement or as per
management''s best estimate of useful life but not exceeding 10 years.
SAP Software expenses are amortised over the period of five years.
vi) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying fixed assets are capitalised as part of the
cost of the assets upto the date the asset is put to use. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Statement of Profit and Loss in the year in which they are
incurred.
vii) Foreign Currency Transactions :
(a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
(b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
(c) Monetary foreign currency items other than those covered by forward
contracts (i. e. receivable, payable, etc.) denominated in foreign
currency is reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
(d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits :
a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits :
i. Defined Contribution Plans: The Company''s Statutory Provident Fund,
Employees'' Super-annuation Fund and Employee State Insurance Scheme are
defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and Employee State Insurance beyond
its contribution.
ii. Defined Benefit Plan: The Employees'' Group Gratuity Fund is the
Company''s defined benefit plan for which Company has taken Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India. Gratuity expenses are recognized at the present value of the
amount payable determined using actuarial valuation techniques.
Actuarial gains and losses in respect of defined benefits are charged
to the Statement of Profit and Loss.
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Taxation :
Income Tax comprises of Current Tax and net changes in Deferred Tax
Assets or Liability during the period. Current Tax is determined as
the amount of tax payable in respect of taxable income for the period
as per the enacted Tax Regulations.
Deferred Tax Assets and Liabilities are recognized for the future tax
consequences of timing differences between the book profit and tax
profit. Deferred Tax Assets and Liabilities other than on carry forward
losses and unabsorbed depreciation under tax laws are recognized when
it is reasonably certain that there will be future taxable income.
Deferred Tax Asset on carry forward losses and unabsorbed depreciation,
if any, are recognized when it is virtually certain that there will be
future taxable profit. Deferred Tax Assets and liabilities are measured
using substantively enacted tax rates. The effect on Deferred Tax
Assets and Liabilities of a change in tax rates is recognized in the
Statement of Profit & Loss in the period of substantive enactment of
the change.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal tax in the future
period.
x) Valuation of stock :
The mode of valuing closing stock is as under :
Inventory Type Mode of Valuation
Raw-Materials, Packing
Materials & Other Materials At lower of cost or net realizable value
Work-in-Process At lower of cost or net realizable value
Finished Goods/
Traded Goods for resale At lower of Cost or net realizable value.
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
The cost is computed based on weighted average basis.
x) Leases
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases.
The initial direct cost of lease is charged to Statement of Profit and
Loss as and when incurred.
Lease rental are charged to Statement of Profit and loss on accrual
basis.
xi) Provision for Bad and Doubtful debts
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xii) Liquidated Damages
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of
liability/contingent liability is estimated on the basis of contracted
terms, facts of each case and to the extent of revenue recognised.
xiii) Impairment of Fixed Assets
Consideration is given at each Balance Sheet date to determine whether
there is any indication of carrying amount of the Company''s fixed
assets. If there is any indication of impairment based on internal /
external factors, then asset''s recoverable amount is estimated. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its estimated recoverable amount. The recoverable amount is
greater of the asset''s net selling price and value in use. In assessing
the value in use, the estimated future cash flows are discounted to the
present value using the weighted average cost of capital. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
xiv) Investment
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xv) Research & Development
Revenue expenditure on research is charged as an expense in the year in
which it is incurred. Product development costs are expensed as
incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the company has an
intention and ability to complete and use or sell the product and the
costs can be measured reliably. Capital expenditure on research and
development is included as additions to fixed assets.
xvii) Provisions, contingent liabilities and contingent assets
Provisions :
Provision is recognised when
a) The Company has a present obligation as a result of past event;
b) It is probable that an outflow of resources embodying economic
benefit is expected to settle the obligation,
c) A reliable estimate can be made for the amount of obligation.
d) Provision for warranty related costs are recognised when product is
sold. Provision is estimated based on historical experience and the
estimates are reviewed annually for any material changes in
assumptions.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date.
Contingent liability :
Contingent Liability is disclosed in case of
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation unless the probability of outflow of resources
is remote.
Contingent assets :
Contingent assets are neither recognised nor disclosed.
Provisions, Contingent Liabilities are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimate.
xviii) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/
(loss) 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 based on the
available information.
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.
xix) Earnings per Share
Basic earnings per share is calculated by dividing the net profit after
tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares outstanding during
the period.
Diluted earnings per share is calculated by dividing the net profit
after tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares determined by
assuming conversion on exercise of conversion rights for all potential
dilutive securities.
Mar 31, 2013
I) Basis of Accounting :
The financial statements are prepared under historical cost convention
on accrual basis of accounting and in accordance with the Accounting
Standards prescribed under the Companies (Accounting Standards) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) Use of Estimates :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & other Accounting Policies :
a. The Company recognise revenue on the sale of products when risks
and rewards of the ownership is transfer to the customer. Sales are
accounted net of amount recovered towards excise duty, sales tax and
sales returns.
b. Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c. Services are accounted for pro-rata over the period of contract.
iv) Fixed Assets & Depreciation :
a) Fixed Assets are stated at cost of acquisition / construction, cost
of improvement and any attributable cost of bringing the asset to its
working condition for intended use or at revalued amounts wherever such
assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method at the rates and in the manner
specified in schedule XIV of the Companies Act, 1956.
v) Intangible Assets and Amortization :
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement or as per
management''s best estimate of useful life but not exceeding 10 years.
SAP Software expenses are amortised over the period of five years.
vi) Borrowing Cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying fixed assets are capitalised as part of the
cost of the assets upto the date the asset is put to use. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Statement of Profit and Loss in the year in which they are
incurred.
vii) Foreign Currency Transactions :
(a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
(b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
(c) Monetary foreign currency items other than those covered by forward
contracts ( i. e. receivable, payable, etc.) denominated in foreign
currency are reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
(d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits
a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits :
i. Defined Contribution Plans: The Company''s Statutory Provident Fund,
Employees'' Super-annuation Fund and Employee State Insurance Scheme are
defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and Employee State Insurance beyond
its contribution.
ii. Defined Benefit Plan :
The Employees'' Group Gratuity Fund is the Company''s defined benefit
plan for which Company has taken Group Gratuity cum Life Insurance
Policy from Life Insurance Corporation of India. Gratuity expenses are
recognized at the present value of the amount payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of defined benefits are charged to the Statement of Profit and Loss.
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Taxation :
Income Tax comprises of Current Tax and net changes in Deferred Tax
Assets or Liability during the period. Current Tax is determined as the
amount of tax payable in respect of taxable income for the period as
per the enacted Tax Regulations
Deferred Tax Assets and Liabilities are recognized for the future tax
consequences of timing differences between the book profit and tax
profit. Deferred Tax Assets and Liabilities other than on carry forward
losses and unabsorbed depreciation under tax laws are recognized when
it is reasonably certain that there will be future taxable income.
Deferred Tax Asset on carry forward losses and unabsorbed depreciation,
if any, are recognized when it is virtually certain that there will be
future taxable profit. Deferred Tax Assets and liabilities are measured
using substantively enacted tax rates. The effect on Deferred Tax
Assets and Liabilities of a change in tax rates is recognized in the
Statement of Profit & Loss in the period of substantive enactment of
the change
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal tax in the future
period
x) Valuation of stock:
The mode of valuing closing stock is as under :
Inventory Type : Mode of Valuation
Raw-Materials, Packing Materials & Other Materials At lower of cost or
net realizable value
Work-in-Process At lower of cost or net realizable value
Finished Goods/ Traded Goods for resale At lower of Cost or net
realizable value.
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
The cost is computed based on weighted average basis.
xi) Leases :
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases.
The initial direct cost of lease is charged to Statement of Profit and
Loss as and when incurred.
Lease rental are charged to Statement of Profit and loss on accrual
basis.
xii) Provision for Bad and Doubtful debts :
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xiii) Liquidated Damages:
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of
liability/contingent liability is estimated on the basis of contracted
terms facts of each case and to the extent of revenue recognised
xiv) Impairment of Fixed Assets :
Consideration is given at each Balance Sheet date to determine whether
there is any indication of carrying amount of the Company''s fixed
assets. If there is any indication of impairment based on internal /
external factors, then asset''s recoverable amount is estimated. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its estimated recoverable amount. The recoverable amount is
greater of the asset''s net selling price and value in use. In assessing
the value in use, the estimated future cash flows are discounted to the
present value using the weighted average cost of capital. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
xv) Investment :
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xvi) Research & Development :
Revenue expenditure on research is charged as an expense in the year in
which it is incurred. Product development costs are expensed as
incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the company has an
intention and ability to complete and use or sell the product and the
costs can be measured reliably. Capital expenditure on research and
development is included as additions to fixed assets.
xvii) Provisions, contingent liabilities and contingent assets :
Provisions :
Provision is recognised when
a) The Company has a present obligation as a result of past event;
b It is probable that an outflow of resources embodying economic
benefit is expected to settle the obligation, c A reliable estimate can
be made for the amount of obligation.
d Provision for warranty related costs are recognised when product is
sold. Provision is estimated based on historical experience and the
estimates are reviewed annually for any material changes in
assumptions.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date.
Contingent liability :
Contingent Liability is disclosed in case of
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to
settle the obligation. b)A possible obligation unless the probability
of outflow of resources is remote.
Contingent assets :
Contingent assets are neither recognised nor disclosed.
Provisions, Contingent Liabilities are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimate.
xviii) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/
(loss) 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 based on the
available information.
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.
xix) Earnings per Share
Basic earnings per share is calculated by dividing the net profit after
tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares outstanding during
the period.
Diluted earnings per share is calculated by dividing the net profit
after tax for the period attributable to the equity shareholders of the
Company by weighted average number of equity shares determined by
assuming conversion on exercise of conversion rights for all potential
dilutive securities
Mar 31, 2012
I) Basis of Accounting.
The financial statements are prepared under historical cost convention
on accrual basis of accounting and in accordance with the Accounting
Standards prescribed under the Companies (Accounting Standards) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) Use of Estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & other Accounting Policies
a) Sales are recognized when goods are dispatched. Sales are accounted
net of amount recovered towards excise duty, sales tax and sales
returns.
b) Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c) Services are accounted for pro-rata over the period of contract.
iv) Fixed Assets & Depreciation.
a) Fixed Assets are stated at cost of acquisition / construction, cost
of improvement and any attributable cost of bringing the asset to its
working condition for intended use or at revalued amounts wherever such
assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method at the rates and in the manner
specified in schedule XIV of the Companies Act, 1956.
v) Intangible Assets and Amortization :
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement. SAP Software
expenses are amortised over the period of five years.
vi) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying fixed assets are capitalised as part of the
cost of the assets upto the date the asset is put to use. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Profit and Loss Account in the year in which they are incurred.
vii) Foreign Currency T ransactions.
a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
c) Monetary foreign currency items other than those covered by forward
contracts ( i. e. receivable, payable, etc.) denominated in foreign
currency are reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits
a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits :
i. Defined Contribution Plans : The Company's Statutory Provident Fund,
Employees' Super- annuation Fund and Employee State Insurance Scheme
are defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and Employee State Insurance beyond
its contribution.
ii. Defined Benefit Plan: The Employees' Group Gratuity Fund is the
Company's defined benefit plan for which Company has taken Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India. Gratuity expenses are recognized at the present value of the
amount payable determined using actuarial valuation techniques.
Actuarial gains and losses in respect of defined benefits are charged
to the profit and loss account..
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Taxation
Current Tax Provision
Provision for Income Tax is determined in accordance with the
provisions of Income Tax Act, 1961.
Deferred Tax Provision
Deferred tax is recognised, on timing differences, being the difference
between the taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
x) Valuation of stock.
The mode of valuing closing stock is as under :
Inventory Type
Mode of Valuation
Raw Materials, Packing Materials & Other Materials
At lower of cost or net realizable value
Work-in-Process
At lower cost or ner realizable value
Finished Goods / Traded Goods for resale
At lower of cost or net realizable value
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
xi) Leases:
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases.
The initial direct cost of lease is charged to profit and loss account
as and when incurred.
Lease rental are charged to Profit and loss Account on accrual basis.
xii) Provision for Bad and Doubtful debts.
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xiii) Liquidated Damages:
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of
liability/contingent liability is estimated on the basis of contracted
terms, facts of each case and to the extent of revenue recognised.
xiv) Impairment of Fixed Assets
Consideration is given at each Balance Sheet date to determine whether
there is any indication of carrying amount of the Company's fixed
assets. If there is any indication of impairment based on internal /
external factors, then asset's recoverable amount is estimated. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its estimated recoverable amount. The recoverable amount is
greater of the asset's net selling price and value in use. In assessing
the value in use, the estimated future cash flows are discounted to the
present value using the weighted average cost of capital. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
xv) Investment
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xvi) Research & Development
Revenue expenditure on research is charged as an expense in the year in
which it is incurred. Product development costs are expensed as
incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the company has an
intention and ability to complete and use or sell the product and the
costs can be measured reliably. Capital expenditure on research and
development is included as additions to fixed assets.
xvii) Provisions, contingent liabilities and contingent assets
Provisions:-
Mar 31, 2011
I) Basis of Accounting
The financial statements are prepared under historical cost convention
on accrual basis of accounting and in accordance with the Accounting
Standards prescribed under the Companies (Accounting Standards) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) Use of Estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & Other Accounting Policies
a. Sales are recognized when goods are dispatched. Sales are accounted
net of amount recovered towards excise duty, sales tax and sales
returns.
b. Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c. Services are accounted for pro-rata over the period of contract.
iv) Fixed Assets & Depreciation.
a) Fixed Assets are stated at cost of acquisition / construction, cost
of improvement and any attributable cost of bringing the asset to its
working condition for intended use or at revalued amounts wherever such
assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method at the rates and in the manner
specified in schedule XIV of the Companies Act, 1956.
v) Intangible Assets and Amortization:
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement. SAP Software
expenses are amortised over the period of five years.
vi) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying fixed assets are capitalised as part of the
cost of the assets upto the date the asset is put to use. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Profit and Loss Account in the year in which they are incurred.
vii) Foreign Currency Transactions.
(a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
(b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
(c) Monetary foreign currency items other than those covered by forward
contracts ( i. e. receivable, payable, etc.) denominated in foreign
currency are reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
(d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits
a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits:
i. Defined Contribution Plans : The Company's Statutory Provident Fund,
Employees' Super-annuation Fund and Employee State Insurance Scheme are
defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and Employee State Insurance beyond
its contribution.
ii. Defined Benefit Plan: The Employees' Group Gratuity Fund is the
Company's defined benefit plan for which Company has taken Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India. Gratuity expenses are recognized at the present value of the
amount payable determined using actuarial valuation techniques.
Actuarial gains and losses in respect of defined benefits are charged
to the profit and loss account..
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Taxation
Current Tax Provision
Provision for Income Tax is determined in accordance with the
provisions of Income Tax Act, 1961.
Deferred Tax Provision
Deferred tax is recognised, on timing differences, being the difference
between the taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
x) Valuation of Stock:
The mode of valuing closing stock is as under:
Inventory Type Mode of Valuation
Raw-Materials,Packing Materials At moving weighted average
& Other Materials cost basis
Work-in-Process At cost
Finished Goods/ Traded Goods At lower of Cost or net
for resale realizable value.
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
xi) Leases:
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. The initial direct cost of
lease is charged to profit and loss account as and when incurred.
Lease rental are charged to Profit and loss Account on accrual basis.
xii) Provision for Bad and Doubtful debts:
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xiii) Liquidated Damages:
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of
liability/contingent liability is estimated on the basis of contracted
terms, facts of each case and to the extent of revenue recognised.
xiv) Impairment of Fixed Assets :
Consideration is given at each Balance Sheet date to determine whether
there is any indication of carrying amount of the Company's fixed
assets. If there is any indication of impairment based on internal /
external factors, then asset's recoverable amount is estimated. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its estimated recoverable amount. The recoverable amount is
greater of the asset's net selling price and value in use. In assessing
the value in use, the estimated future cash flows are discounted to the
present value using the weighted average cost of capital. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
xv) Investment:
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xvi) Research & Development:
Revenue expenditure on research and development is charged as an
expense in the year in which it is incurred. Capital expenditure on
research and development is included as additions to fixed assets.
xvii) Provisions, contingent liabilities and contingent assets
Provisions:-
Provision is recognised when
a) The Company has a present obligation as a result of past event;
b) It is probable that an outflow of resources embodying economic
benefit is expected to settle the obligation,
c) Areliable estimate can be made for the amount of obligation.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date.
Contingent liability:-
Contingent Liability is disclosed in case of
a) A present obligation arising from a past event, when it is not
probable that an outflow of
resources will be required to settle the obligation.
b) Apossible obligation unless the probability of outflow of resources
is remote.
Contingent assets:-
Contingent assets are neither recognised nor disclosed.
Provisions, Contingent Liabilities are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimate.
Mar 31, 2010
I) Basis of Accounting
The financial statements are prepared under historical cost convention
on accrual basis of accounting and in accordance with the Accounting
Standards prescribed under the Companies (Accounting Standards) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) Use of Estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
iii) Revenue Recognition & other Accounting policies
a. Sales are recognized when goods are dispatched. Sales are accounted
net of amount recovered towards sales tax and sales returns. Discount,
rate difference and excise duty paid are shown by way of further
deduction from sales.
b. Sales returns are accounted on actual receipt of return goods /
settlement of claims.
c. Services are accounted for pro-rata over the period of contract.
d. Interest is recognized on time proportion basis taking into account
the amount outstanding and rate of interest applicable.
e. Export Incentive under Focus Market Scheme is recognized as and
when granted.
f. Rate differences are accounted on actual settlement with the
parties.
g. Insurance and other claims are accounted on cash basis. h. Custom
Duties are accounted on cash basis.
i. I ncentive to Field staff is accounted on settlement of claims.
j. Ex-gratia to employees covered under the Bonus Act is accounted on
cash basis.
k. Lease rent/License fees are accounted on accrual basis.
I. Leave Travel Allowance is accounted as and when claimed and paid.
iv) Fixed Assets & Depreciation
a) Fixed Assets are stated at cost of acquisition / construction, cost
of improvement and any attributable cost of bringing the asset to its
working condition for intended use or at revalued amounts wherever such
assets have been revalued less accumulated depreciation.
b) Depreciation on all assets except Buildings at Sachin is provided on
written down value method and Depreciation on Buildings at Sachin is
provided on Straight line Method at the rates and in the manner
specified in schedule XIV of the Companies Act 1956.
v) Intangible assets and amortization
Intangible assets are measured at cost. Lump sum fees for technical
know-how is amortised over the period of agreement. Software expenses
are amortised over the period of five years.
vi) Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of fixed assets are capitalised as part of the cost of the
assets, upto the date the asset is put to use. All other borrowing
costs are charged to the Profit and Loss Account in the year in which
they are incurred.
vii) Foreign Currency Transactions
a) Transactions other than those covered by forward contracts are
accounted at exchange rates prevailing on the date of transaction.
b) Forward premium in respect of forward exchange contract is
recognised over the life of contract.
c) Monetary foreign currency items other than those covered by forward
contracts ( i. e. receivable, payable, etc.) denominated in foreign
currency are reported using the closing exchange rate on each balance
sheet date. Exchange difference is recognised as income/expense.
d) Non-monetary foreign currency items are carried at historical cost
determined on the date of transaction.
viii) Employee Benefits
a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and the expected cost of bonus are recognized
in the period in which an employee renders the related services.
b) Post-Employment Benefits
i. Defined Contribution Plans : The Companys Statutory Provident Fund,
Employees Super-annuation Fund and Employee State Insurance Scheme are
defined contribution plans. The Super-annuation fund created by the
company has taken Super-annuation cum life insurance policy from Life
Insurance Corporation of India. The company has no further obligation
for Super-annuation, Provident Fund and Employee State Insurance beyond
its contribution.
ii. Defined Benefit Plan : The Employees Group Gratuity Fund is the
Companys defined benefit plan for which Company has taken Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India. Gratuity expenses are recognized at the present value of the
amount payable determined using actuarial valuation techniques.
Actuarial gains and losses in respect of defined benefits are charged
to the profit and loss account.
iii. Provision for accrued leave encashment is provided for on the
basis of actuarial valuations made at the year end.
ix) Cenvat Credit
Cenvat credit available on purchase of materials, purchase of capital
goods and input services is not charged to cost of material, capital
goods and services. Cenvat credit availed is accounted by way of
adjustment against excise duty payable on dispatch of finished goods or
service tax payable on rendering of services.
x) Taxation
Current Tax Provision
Provision for Income Tax and Fringe Benefit Tax is determined in
accordance with the provisions of the Income Tax Act, 1961.
Deferred Tax Provision
Deferred tax is recognised, on timing differences, being the difference
between the taxable,incorne and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
xi) Valuation of stock
The mode of valuing closing stock is as under :-
Raw-Materials, Packing Materials
and Other Matrtials : at moving weighted average cost basis
Work-in-Process : at Cost.
Finished Goods/
Traded Goods : at lower of Cost or net realizable value.
The cost for the purpose of valuation of Finished Goods and
work-in-process includes material cost, direct conversion cost and
appropriate share of overheads incurred for bringing the goods to their
present location and condition plus excise duty wherever applicable.
xii) Leases
Assets acquired on lease and assets given on lease where a significant
portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. The initial direct cost of
lease is charged to profit and loss account as and when incurred. Lease
rental are charged to Profit and loss Account on accrual basis.
xiii) Provision for Bad and Doubtful debts
Provision is made in accounts for Bad and Doubtful Debts as and when
the same in opinion of the management are considered doubtful of
recovery.
xiv) Liquidated Damages
Liabilities in respect of Liquidated Damages are provided if and to the
extent, not disputed by the Company. Liquidated Damages disputed by the
Company are treated as contingent liability. The amount of liability
and contingent liability is estimated on the basis of contracted terms,
facts of each case and to the extent of revenue recognised.
xv) Impairment of Fixed Assets
Consideration is given at each Balance Sheet date to determine whether
there is any indication for impairment of carrying amount of the
Companys fixed assets. If there is any indication of impairment based
on internal / external factors, then assets recoverable amount is
estimated. An impairment loss is recognized wherever the carrying
amount of an asset exceeds its estimated recoverable amount. The
recoverable amount is greater of the assets net selling price and
value in use. In assessing the value in use, the estimated future cash
flows are discounted to the present value using the weighted average
cost of capital. Previously recognized impairment loss is further
provided or reversed depending on changes in circumstances.
xvi) Investment
Long-term investments are carried at cost. Provision for diminution is
made to recognize a decline, other than temporary in value of long-term
investments and is determined separately for each individual
investment. Current investments are carried at lower of cost and fair
value computed separately in respect of each category of investment.
xvii) Research & Development
Revenue expenditure on research and development is charged as an
expense in the year in which it is incurred. Capital expenditure on
research and development is included as additions to fixed assets.
xviii) Provisions, contingent liabilities and contingent assets
Provisions:-
Provision is recognised when
a) The Company has a present obligation as a result of past event;
b) It is probable that an outflow of resources embodying economic
benefit is expected to settle the obligation, and
c) A reliable estimate can be made for the amount of obligation.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date.
Contingent liability:-
Contingent Liability is disclosed in case of
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation,
b) A possible obligation unless the probability of outflow of resources
is remote.
Contingent assets:-
Contingent assets are neither recognised nor disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance Sheet date and adjusted to reflect the current best
estimate.
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ഓഹരി വിപണി 11 മാസത്തെ താഴ്ചയില്, നിഫ്റ്റി, സെന്സെക്സ് കൂപ്പുകുത്തി, കാരണങ്ങളറിയാം -
പശ്ചിമേഷ്യന് സംഘര്ഷം; ഇന്ത്യന് ഓഹരി വിപണിയ്ക്ക് എന്ത് സംഭവിക്കും, എസ്ഐപി നിര്ത്തേണ്ടതുണ്ടോ? -
ഇന്ത്യന് ഓഹരി വിപണി വെള്ളിയാഴ്ച കൂപ്പുകുത്തി, കാരണങ്ങളും ഭാവി സൂചനകളും അറിയാം -
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590 കോടി രൂപയുടെ തട്ടിപ്പ്, ഐഡിഎഫ്സി ഫസ്റ്റ്ബാങ്ക് ഓഹരി കൂപ്പുകുത്തി, നിക്ഷേപകര് എന്തു ചെയ്യണം? -
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