NOTE 1: SIGNIFICANT ACCOUNTING POLICIES a. BACKGROUND Parnax Lab Limited is a public company incorporated under the provisions of the Companies Act, 1956. The Company is principally engaged in the business activities of manufacturing and export of Pharmaceutical Formulations. b. SIGNIFICANT ACCOUNTING POLICIES i. Basis Of Preparation The financial statements have been brpared in accordance with the Generally Accepted accounting Principles in India under the historical cost convention. The company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2104. ii. Use of Estimates The brparation of the financial statements in conformity with the Indian GAAP requires management to make judgement, estimates and assumptions that affects the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring material adjustment to the carrying amounts of assets or liabilities in future periods. iii. Revenue Recognition The Company follows Mercantile system of Accounting and Income and expenditure are recognised on accrual basis. iv. Fixed Assets All fixed Assets are stated at cost of acquisition less accumulated debrciation (net of cenvat, wherever availed). All cost relating to the acquisition and installation of the fixed assets are capitalised and includes financing costs relating to borrowed fund attributable to the acquisition of fixed assets up to the date the fixed assets is put to use. v. Debrciation Debrciation has been provided on straight-line method and in accordance with, Method and useful life brscribed in 3. Debrciation on Additions/Deletions during the year has been provided on pro rata basis vi. Inventories Valuation Raw material and Packing Material: At lower of Cost or Net realisable value. The cost is arrived at on first-in-first-out basis and net of cenvat credit availed. Finished Goods and Work in Progress: At lower of Cost or Net realisable value. Cost includes appropriate allocation of overheads and is arrived at on first-in-first-out basis. vii. Investments Long term investments are stated at cost less provision for diminution in value other than temporary, if any. viii. Borrowing Cost Borrowing Costs that are attributable to the acquisition and construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the year in which they are incurred. ix. Foreign Currency Transaction Foreign currency transactions are accounted on the basis of exchange rate brvailing at the time of transaction. The foreign currency transaction remains outstanding at year-end are restated at rate brvailing on 31st March. The Exchange difference if any arises due to exchange fluctuation is charged to Profit and Loss Account. x. Taxes on Income Current Tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced upto the balance sheet date. Deferred Tax assets and liabilities are recognised for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the Profit & Loss account of the respective year of change. Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during specified period. xi. Retirement Benefits i. Provident Fund Retirement benefit in form of Provident Fund is a defined contribution plan and the contributions made for the eligible employees, are charged to the Profit & Loss Account of the year when the contributions to the respective funds are dues. ii. Gratuity Retirement gratuity liability of employees is a defined benefit obligation. The company has taken Group gratuiScheme offered by Life Insurance Corporation of India (LIC). Annual contributions are made on the basis intimation received from LIC. The company accounts for liability for future gratuity benefits based on actuarvaluation carried out as at the end of each financial year. Actuarial gains and losses are recognised in full in stateme ty of ial nt of Profit and Loss for the period in which they occur. xii. Earning Per Share Basic earning per share are calculated by dividing the net profit /(loss) for the year attributable to equity shareholders (after deducting attributable taxes) by average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. xiii. Segmental Reporting The Company is engaged in manufacture of Pharmaceutical Formulations. The entire operations are governed by same set of risk and return; hence the same has been considered rebrsenting a single primary segment. xiv. Impairment of Assets An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Statement of Profit & Loss in the year in which an asset is identified as impaired. The impaired loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. xv. Provisions, Contingent Liabilities And Contingent Assets Provisions are recognized in the accounts in respect of brsent probable obligations arising as a result of past events and it is probable that there will be an outflow of resources, the amount of which can be reliably estimated Contingent liabilities are disclosed in respect of possible obligation that arises from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly with in the control of the company. Contingent Assets are neither recognized nor disclosed in the financial statements. 3. Balance of Investment in M/s Novonax LLP is subject to confirmation 4. Previous year's figures have been regrouped and rearranged, to necessary. correspond with the figures of current year wherever Figures in bracket rebrsent brvious year. As per our report of even date For Ladha Singhal and Associates Chartered Accountants Firm Registration No : 120241W For and on behalf of the Board of Directors For Parnax Lab Ltd. (Vinod Ladha) Partner M. No. 104151 (Prakash M. Shah) Whole Time Director & CEO(DIN 00440980) (Baiju M. Shah) Whole Time Director & CFO (DIN 00440806) Place : Mumbai Date : 29th May, 2015 |