Basis of brparation of financial statements

The financial statements which have been brpared and brsented under the historical cost convention on the accrual basis of accounting, are in accordance with the requirements of the Companies Act,1956 ('the Act') and comply to all material aspects with the applicable Accounting Standards brscribed by the Central Government in accordance with the Companies (Accounting Standard) Rules, 2006, to the extent applicable.

Use of estimates

The brparation of Consolidated Financial Statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in brparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods.

Significant accounting policies:

Revenue Recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customer/agent and no effective ownership is retained. Sales are inclusive of excise duty and net of sales tax and discounts.

Export incentives received pursuant to the Duty Drawback Scheme are accounted for, on an accrual basis, to the extent it is probable that realisation is certain.

Interest revenue is recognised on a time proportionate basis, taking into account the amount outstanding and the rates applicable.

Fixed assets, Debrciation and Amortisation

Fixed assets, both tangible and intangible are stated at cost of acquisition. Cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets. Interest on borrowings to finance acquisition of fixed assets during qualifying period is capitalised.

Leasehold improvements rebrsent expenses incurred towards civil work and interior furnishings on the leased brmises.

Costs relating to acquisition of technical know-how and software are capitalised as Intangible Assets.

Debrciation  on fixed assets other than plant and equipments has been  provided on  Written Down Value Method and on plant and equipments on Straight Line Method at the rates and  in the manner  brscribed in Schedule  XIV to the Companies Act, 1956.

Leasehold improvements and leasehold land are debrciated over the unexpired primary period of lease except for lease hold land acquired under perpetual lease.

Debrciation on assets not owned by the Group is provided over the period of the economic life of the assets estimated at five years.

Intangible Assets are amortised on a straight line basis over a period of four years.

Individual items of fixed assets capitalised during the year costing up to rupees five thousand each are fully debrciated in the first year.

Investments

Investments are classified into long-term investments and current investments. Long-term investments are carried at cost. Provision for diminution in the value of long-term investments is not provided for unless it is considered other than temporary. Current investments are valued at lower of cost and net realisable value.

Foreign currency transactions

Initial Recognition - Transactions denominated in foreign currencies are recorded at the rates of exchange brvailing on the date of the transaction.

Conversion - Monetary assets and liabilities denominated in foreign currency are converted at the rate of exchange brvailing on the date of the Balance Sheet.

Exchange Differences - All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Statement of Profit and Loss in the year in which they arise.

Derivative instruments

The Group limits the effects of foreign exchange rate fluctuations by following established risk management policies including the use of derivatives.  The Group enters into forward exchange contracts, where the counterparty is a bank.

As per Accounting Standard ('AS') 11 - The Effects of Changes in Foreign Exchange Rates', the brmium or the discount on forward exchange contracts not relating to firm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract.  All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle and losses, if any, are recognised in the Statement of Profit and Loss.

Impairment of assets

In accordance with Accounting Standard (AS) 28 on ‘Impairment of Assets’ as notified by the Central Government under the Companies Act, 1956, the carrying amounts of the Group’s assets are reviewed at each Balance Sheet date to determine whether there is any impairment. The recoverable amount of the assets or where applicable, that of the cash generating unit to which the asset belongs is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognized in the statement of Profit and Loss or against revaluation surplus where applicable.

h.

Employee benefits

i.

All short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees.

ii.

Defined Contribution Plans

The Group contributes to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 that is a defined contribution plan and contribution paid or payable is recognised as an expense in the period in which the employee renders services.

Superannuation benefits, a defined contribution plan, have been funded with Life Insurance Corporation of India and the contribution is charged to Statement of Profit and Loss, when the contribution to the fund is due.

iii.

Defined Benefit Plans

The Group’s liability towards compensated absences, being defined benefit plan, is accounted for on the basis of an independent actuarial valuation done at the year end and actuarial gains/losses are charged to the Statement of Profit and Loss.

The Group provides for gratuity benefit, which is a defined benefit plan, covering all its eligible employees. Liability under gratuity plan is determined on actuarial valuation done by Life Insurance Corporation of India (LIC) during the year/period, based upon which the Group contributes to the scheme with LIC. The Group also provides for the additional liability over the amount determined by LIC based on an actuarial valuation done by an independent actuary as at the Balance Sheet date.

In case of one of the subsidiary, Cal India Food International has a discretionary profit sharing plan and 401(k) matching plan covering substantially all of eligible employees of that company. Profit sharing is funded through annual contributions to the plan.

5	Significant accounting policies:
a.	Revenue Recognition
i.	Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.
ii.	Revenue from sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customer/agent and no effective ownership is retained. Sales are inclusive of excise duty and net of sales tax and discounts.
iii.	Export incentives received pursuant to the Duty Drawback Scheme are accounted for, on an accrual basis, to the extent it is probable that realisation is certain.
iv.	Interest revenue is recognised on a time proportionate basis, taking into account the amount outstanding and the rates applicable.
b.	Fixed assets, Debrciation and Amortisation
i.	Fixed assets, both tangible and intangible are stated at cost of acquisition. Cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets. Interest on borrowings to finance acquisition of fixed assets during qualifying period is capitalised.
ii.	Leasehold improvements rebrsent expenses incurred towards civil work and interior furnishings on the leased brmises.
iii.	Costs relating to acquisition of technical know-how and software are capitalised as Intangible Assets.
iv.	Debrciation  on fixed assets other than plant and equipments has been  provided on  Written Down Value Method and on plant and equipments on Straight Line Method at the rates and  in the manner  brscribed in Schedule  XIV to the Companies Act, 1956.
v.	Leasehold improvements and leasehold land are debrciated over the unexpired primary period of lease except for lease hold land acquired under perpetual lease.
vi.	Debrciation on assets not owned by the Group is provided over the period of the economic life of the assets estimated at five years.
vii.	Intangible Assets are amortised on a straight line basis over a period of four years.
viii.	Individual items of fixed assets capitalised during the year costing up to rupees five thousand each are fully debrciated in the first year.
c.	Investments
	Investments are classified into long-term investments and current investments. Long-term investments are carried at cost. Provision for diminution in the value of long-term investments is not provided for unless it is considered other than temporary. Current investments are valued at lower of cost and net realisable value.
d.	Foreign currency transactions
i.	Initial Recognition - Transactions denominated in foreign currencies are recorded at the rates of exchange brvailing on the date of the transaction.
ii.	Conversion - Monetary assets and liabilities denominated in foreign currency are converted at the rate of exchange brvailing on the date of the Balance Sheet.
iii.	Exchange Differences - All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Statement of Profit and Loss in the year in which they arise.
e.	Derivative instruments
i.	The Group limits the effects of foreign exchange rate fluctuations by following established risk management policies including the use of derivatives.  The Group enters into forward exchange contracts, where the counterparty is a bank.
ii.	As per Accounting Standard ('AS') 11 - The Effects of Changes in Foreign Exchange Rates', the brmium or the discount on forward exchange contracts not relating to firm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract.  All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle and losses, if any, are recognised in the Statement of Profit and Loss.
f.	Impairment of assets
	In accordance with Accounting Standard (AS) 28 on ‘Impairment of Assets’ as notified by the Central Government under the Companies Act, 1956, the carrying amounts of the Group’s assets are reviewed at each Balance Sheet date to determine whether there is any impairment. The recoverable amount of the assets or where applicable, that of the cash generating unit to which the asset belongs is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognized in the statement of Profit and Loss or against revaluation surplus where applicable.

Segment reporting
The Company operates only in one primary business segment i.e. 'Biochemicals' and hence no separate information for primary segmentwise disclosure is required.
By geographical segments
	Year ended 31 March 2014		Year ended 31 March 2013
	Rs. in million		Rs. in million
Segment revenue
India	884.07		913.91
Outside India	1,510.43		1,290.27
Total	2,394.50		2,204.18
	As at 31 March 2014		As at 31 March 2013
	Rs. in million		Rs. in million
Segment assets
India	2,013.72		1,968.33
Outside India	2,047.02		2,007.91
Total	4,060.74		3,976.24