NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2014

NOTE - 1: SIGNIFICANT ACCOUNTING POLICIES:

1.1.  Basis of brparation of Financial Statements:

      The financial statements of the Company are brpared on accrual basis under the historical cost convention in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), the relevant provisions of the Companies Act, 1956 (which continue to be applicable in respect of section 133 of the companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs)  and the applicable Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended). The accounting policies adopted in brparation of the financial statement are consistent with those followed in the brvious year.

1.2.  Use of Estimates:

      The brparation of financial statements requires the management to make estimates and assumptions 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. Differences between the actual results and the estimates are recognised in the period in which the same are known / materialised.

1.3.  Tangible Fixed Assets

a)  Fixed Assets are carried at cost less accumulated debrciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of debrciable fixed assets are adjusted to the cost of the respective assets and debrciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance.

b) Capital work in progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

1.4. Intangible Assets:

       Intangible assets are recognised only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

1.5. Debrciation and Amortisation:

a) Debrciation on fixed assets is provided on straight-line basis in the manner and at the rates brscribed in Schedule -XIV to the Companies Act, 1956 except for the IT equipments which are debrciated over their useful life (being lower than the life considering the rates brscribed in Schedule XIV to the Companies Act, 1956) as determined by the management on the basis of technical evaluation. Leasehold lands are debrciated over the useful life of the respective lands. Assets costing Rs. 5,000/- or less are debrciated at rate in the year of purchase.

b) Amortisation of intangible assets are done within useful life of the intangible assets. The estimated useful lives of intangible assets and the amortisation period are reviewed at the end of each financial year. Trademark & Patents are amortized over the period of 5 years.

1.6. Operating Leases:

       Assets taken/given on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments/receipts under operating leases are recognised as expenses/income on accrual basis in accordance with the respective lease agreements.

1.7. Investments:

       Long-Term investments are stated at cost which includes cost of acquisition and related expenses. Investments in equity/ordinary shares in foreign currency are stated at cost by converting at exchange rate brvailing at the time of acquisition. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary. Current Investments are carried at lower of cost and fair value.

1.8.Inventories:

a)     Raw Materials & Packing Materials are valued at lower of cost or net realisable value; cost is calculated on moving weighted average.

b)     Finished Goods and Work–in–Progress are valued at lower of cost and net realisable value. In respect of finished goods, cost includes materials, appropriate share of utilities, other overheads and applicable excise duty. Trading Goods are valued at lower of cost or net realisable value.

1.9. Revenue Recognition:

a)      Revenue from sale of goods is recognised when the significant risks and rewards in respect of ownership of products are transferred by the Company.

b)      Revenue (including in respect of insurance or other claims, interest etc.) is recognised when it is reasonable to expect that the ultimate collection will be made.

c)      Revenue from product sales is stated net of returns, sales tax and applicable trade discounts and allowances. Revenue from product sales includes excise duty, wherever applicable.

d)    Income from research and product registration (dossiers) services and technology income is recognised as revenue when earned in accordance with the terms of the relevant agreements.

e)    Dividend from investment is recognised as revenue when right to receive the payments is established.

f)     Interest income is recognised on time proportionate basis.

1.10. Export Incentives:

          Export benefits available under brvalent schemes are accrued in the year in which the goods are exported and are accounted to the extent considered receivable.

1.11. Excise Duty and Cenvat:

          In accordance with the method of accounting regularly employed by the company, Cenvat has been accounted on the basis of “exclusive method” as recommended by the Institute of Chartered Accountants of India wherever applicable. Provision for excise duty has been made on goods lying in bonded warehouses.  

1.12. Research and Development:

       Revenue expenditure incurred on research and development is charged to the respective heads in the Profit and Loss account, in the year it is incurred and Capital expenditure there on is included in the respective heads under fixed assets.

1.13. Foreign Exchange Transactions:

a)  Transactions in foreign currency are recorded at the original rate of exchange in force at the time transactions are effected. Exchange differences arising on settlement of all transactions are recognized in the Profit and Loss Account.

b)  Exchange Differences arising on translation of short term monetary items denominated in foreign currency are restated using the exchange rate brvailing as at the date of the Balance Sheet and the resulting exchange difference is recognised in Profit and Loss Account.

c)  The exchange differences arising on restatement / settlement of long-term foreign currency monetary items are capitalised as part of the debrciable fixed assets to which the monetary item relates and debrciated over the remaining useful life of such assets or amortised on settlement over the maturity period of such items.

d)  In case of forward exchange contracts entered into to hedge the foreign currency exposure in respect of short term monetary items, the difference between the exchange rate on the date of such contracts and the year end rate is recognized in the Profit and Loss Account. Any profit/loss arising on cancellation of forward exchange contract is recognized as income or expense of the year. Premium/discount arising on such forward exchange contracts is amortised as income/expense over the life of contract.

e)  Foreign offices/branches: In respect of the foreign offices/branches, which are integral            foreign operations, all revenues and expenses (except debrciation) during the year are reported at average rate. Monetary assets and liabilities are restated at the year-end exchange rate. Non-monetary assets and liabilities are stated at the rate brvailing on the date of the transaction. Net gain/loss on foreign currency translation is recognised in the Profit and Loss Account.

1.14. Employment Benefits:

a) Post Employment Benefits and Other Long Term Benefits:

i)     Defined Contribution Plan:

       Company’s contribution for the year paid/payable to defined contribution retirement benefit schemes are charged to Profit and Loss Account.

       The Company’s contribution towards provident fund and superannuation fund for certain eligible employees are considered to be defined contribution plan for which the Company made contribution on monthly basis.

ii)     Defined Benefit and Other Long Term Benefit Plans:

       Company’s liabilities towards defined benefit plans and other long term benefits viz. gratuity and compensated absences expected to occur after twelve months, are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the balance sheet date. Actuarial gains and losses are recognised in the Profit and Loss account in the period of occurrence of such gains and losses. The retirement benefit obligation recognised in the balance sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets.

 b)       Short-term employee benefits:

              Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised undiscounted during the period employee renders services. These benefits include performance incentives.            

1.15. Taxes on Income:

           Income Tax is accounted for in accordance with Accounting Standard 22 (AS 22) “Accounting for Taxes on Income”. Tax expense comprises both current tax and deferred tax. Current tax is measured at the amount expected to be paid or recovered from the tax authorities using the applicable tax rates.

           Minimum Alternate Tax (MAT) credit entitlement is recognized as an asset by crediting the Profit and Loss Account and disclosing an equivalent amount as an asset under ‘Long Term Loans and Advances’ in accordance with guidance note on “Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961” issued by the Institute of Chartered Accountants of India.

           Deferred tax assets and liabilities are recognised for future tax consequence attributable to timing differences between taxable income and accounting income that are measured at relevant enacted tax rates. At each balance sheet date the Company reassesses unrecognised deferred tax assets, to the extent they become reasonably certain or virtually certain of realisation, as the case may be.

1.16.  Borrowing Costs:

          Proportionate borrowing cost attributable to acquisition, construction and installation of fixed asset is capitalised. Other borrowing cost not attributable to the same are recognised as an expense in the period in which they are incurred. Borrowing costs for working capital finance is charged to revenue.

1.17.  Provision, Contingent Liabilities and Contingent Assets:

       Provisions involving substantial degree of estimation in measurement are recognised when there is brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

1.18.  Impairment of Assets:

          An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

1.19.  Government Grants:      

Government Grants of Capital nature received as cash subsidy is accounted as Capital Reserve in the year of its receipt or when there is a reasonable certainty of its being received. Government Grants of revenue nature is reduced from related expenses in the statement of Profit and Loss in the year of its receipt or when there is a reasonable certainty of its being received. 

Disclosure of Employee Benefits as per Accounting Standard 15 is as under:

(i)  Defined contribution plans:

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. The provident fund plan is operated by the Government administrated employment provident fund. Eligible employees receive the benefits from the said Provident Fund. Both the employees and the Company make monthly contribution to the Provident Fund plan equal to a specific percentage of the covered employee’s salary. The minimum interest rate payable to the beneficiaries every year is being notified by the Government. During the year the Company recognised Rs.1,106.30  Lakhs (P.Y. Rs. 934.77 Lakhs) for provident fund contributions.

The Superannuation fund is administered by the Life Insurance Corporation of India (LIC). Under the plan, The Company is required to contribute br determined percentage of payoff cost of the

eligible employee to the superannuation plan to fund the benefit. During the year Company recognised Rs.26.52 Lakhs (P.Y. Rs.24.40 Lakhs) for superannuation contribution.

(ii)  Defined benefit plan:

The Company earmarks liability towards unfunded Group Gratuity and Compensated absences and provides for payment to vested employees as under:

a)  On Normal retirement/ early retirement/ withdrawal/resignation:

    As per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

b)  On death in service:

    As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

    The most recent actuarial valuation of plan assets and the brsent value of the defined benefit obligation for gratuity were carried out as at March 31, 2014 by the Actuary. The brsent value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.     

    The following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at March 31, 2014                                  

Rs. in Lakhs

Segmental Reporting as required by Accounting Standard – 17 (AS-17):-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

i)    Primary Business Segment:

The Company is currently focussing on two business segments i.e., pharmaceutical and investing & real estate. The business of food division is insignificant and accordingly has not been considered as a separate business segment. The research & development activity of the Company is part of the pharmaceutical business. The disclosure required as per Accounting Standard -17 (AS-17) for the segment reporting is as under.   

                                            Rs.in Lakhs 

Particulars	Pharma Business	Others (Investing & Real Estate)	Unallocable	Total
	2013-14	2012-13	2013-14	2012-13	2013-14	2012-13	2013-14	2012-13
REVENUE
Revenue (net)	270,839.71	2,32,789.51	-	-	-	-	270,839.71	2,32,789.51
Other Income	899.17	748.16	16,035.27	16,175.41	-	-	16,934.44	16,923.57
Total Revenue	271,738.88	2,33,537.67	16,035.27	16,175.41	-	-	287,774.15	2,49,713.08
RESULT
Profit before Interest, Debrciation and Tax	42,181.39	46,431.46	16,030.50	16,082.58	-	-	58,211.89	62,514.04
Less ( Interest)			5,618.27	5,281.03	2,809.14	2,640.52	8,427.41	7,921.55
Less ( Debrciation)	4,222.88	3,510.77	50.13	90.75		-	4,273.01	3,601.52
Profit before tax	37,958.51	42,920.69	10,362.10	10,710.81		-	45,511.47	50.990.98
Less:  Tax				-	-	00000000—29.24	-	29.24
Less:  Deferred Tax Liabilty/(Asset)				-	1101.13	1,348.75	1,101.13	1,661.34
Profit after tax	37,958.51	42,920.69	10,362.10	10,710.81	(3,910.27)	(4,018.51)	44,410.34	49,612.99
OTHER INFORMATION
Segmental Assets	232,883.51	198,774.03	148,884.42	175,607.62	41,439.10	30,438.80	423,207.03	4,04,820.45
Segmental Liabilities	105,208.60	100,431.70	32,908.42	61,616.59	285,090.01	242,772.16	423,207.03	4,04,820.45
Capital Expenditure	13,214.64	21,963.49	-	-			13,214.64	21,963.49
Debrciation	4,222.88	3,510.77	50.13	90.75			4,273.01	3,601.52
Non Cash Expenditure  Other Than Debrciation	128.16	125.80	-	89.31	-	-	128.16	215.11

ii)   Secondary Geographical Segment:-

The Segment Revenue in the geographical segments considered for disclosure are on the basis of customer location. In case of Segment asset and segment capital expenditure the amount attributable to geographical segment Öutside India”is less than 10% of the respective Total Assets and Total Capital Expenditure of the reporting enterprise and hence not disclosed separately.

Particulars	India	Outside India	Total
Segment Revenue- Current Year	2,43,900.88	27,838.00	2,71,738.88
- Previous Year	2,10,897.04	22,640.29	2,33,537.33