NOTES TO THE FINANCIAL STATEMENT a) Basis of Preparation of Financial Statements The Financial Statements of the Company have been brpared and brsented in accordance with the Generally Accepted Accounting Principles in India ( Indian GAAP) under the Historical Cost Convention on an accrual basis of accounting. The Company has brpared Financial Statements to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013 read with rule 7 of Companies (Accounts) Rules 2014. The Accounting Policies adopted in the brparation in Financial Statements are consistent with those of brvious year. b) Use of Estimates and Judgements In brparation of the Financial Statements, in conformity with Indian GAAP the management is required to make Judgements, Estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of the Financial Statements and the reported amount of revenues and expenses for the year. All though these estimates are based on the management’s best knowledge of current events and actions, uncertainty of these assumptions and estimates could result in the outcomes different from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods c) Fixed Assets: Certain Fixed Assets have been recorded at a value transferred as per the Scheme of Arrangement. Other Fixed Assets are recorded at cost of acquisition / construction less accumulated debrciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use . d) Debrciation / Amortisation: Debrciation on Fixed Assets is provided on certain assets on Straight Line Basis and on certain assets on written down value method as per the useful life brscribed in schedule II of the Companies Act 2013 During the year the management of the Company has, based on independent technical evaluation, assessed the remaining useful life of certain fixed assets of Sikkim Plant and in terms of these evaluations, the useful life of Buildings, Plant and Equipment is determined of 10 years each. Leasehold Land is amortised over the period of lease e) Borrowing Cost Borrowing Costs directly attributable to the acquisition and construction of an asset which takes a substantial period of time to get ready for their intended use are capitalised as part of the cost of such assets until such time the asset is ready for its intended use. All other borrowing costs are regonised in the Statement of Profit and Loss in the period they are incurred. f) Investments: Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value. Certain Investment in Subsidiary company are stated at a value transferred as per the Scheme of Arrangement. The subsequent investments in the Subsidiary are valued at cost. g) Inventories: All Inventories are valued at lower of cost and net realisable value. Raw Materials, Stores and Spares & Packing Material are valued at lower of cost determined on weighted average basis and net realisable value. Work in process is valued at lower of cost and net realisable value. Finished Goods are valued at lower of cost including excise payable thereon and net realisable value. Traded Goods are valued at lower of Purchase price and net realisable value. Slow moving Raw Materials, Stores & Spares are valued at estimated net realisable value. h) Revenue from Operations Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised when the significant risks and rewards of the ownership of the goods have been passed to the buyer. Sales are disclosed inclusive of excise duty, but net of sales return, service tax, value added tax and CST Income from operations includes revenue earned, as per the terms agreed with the customers, from development of products and assignment of patent rights. Export benefits available under brvalent schemes are accounted to the extent considered receivable i) R & D Expenses All revenue expenses related to R & D including expenses in relation to development of product/ processes and expenses incurred in relation to compliances with international regulatory authorities in obtaining of Abbreviated New Drug Applications (ANDA) are charged to the Statement of Profit & Loss in the year in which it is incurred. j) Foreign Exchange Transactions Foreign Currency transactions are initially recorded at the rate of exchange brvailing on the date of transaction Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are converted at year end exchange rates. The difference in conversion of monetary assets & liabilities and realised gains & losses on foreign exchange transaction are recognised in the Statement of Profit and Loss. In respect of Derivative instruments for future probable transactions, the mark to market loss as at the year end is charged to Statement of Profit and Loss. k) Employee benefits Defined Contribution plan Contribution to pension fund, Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the HDFC Standard Life Insurance Company Ltd. and ICICI Prudential Life Insurance Company Ltd. and ESIC and labour welfare fund are recognised as an expense in the statement of profit and loss. Defined Benefit plan The Company’s contribution to provident fund, administered through a Company managed trust, is recognised as an expense in the Statement of Profit and Loss. The gratuity liability, actuarially valued, is funded through the scheme administered by the Life Insurance Corporation of India (LIC) and HDFC Standard Life Insurance and the amounts paid / provided under the scheme are charged to Statement of Profit and Loss Accumulated leave liability (other than sick leave) as at the year end is provided as per actuarial valuation. Accumulated sick leave is provided for at actual in the Statement of Profit and Loss. l) Taxes on Income Provision for taxation comprises of Current Tax and Deferred Tax. Current Tax provision has been made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred tax resulting from “timing differences” between taxable and accounting income is accounted in accordance with Accounting Standard 22 (AS-22) “Accounting for taxes on income” notified under the Companies (Accounts ) Rules, 2014, using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets can be realised in future. However, where there is unabsorbed debrciation or carry forward losses under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date to reassess its realisation. The benefit of credit against the payment made towards MAT for the earlier years is available in accordance with the provisions of section 115J (AA) of income tax act 1961 over a period of subsequent 10 assessment year and it is recognised to the extent of deferred tax liability in view of the certainty involved of its realisation against reversal of deferred tax liability. m) Provisions, Contingent Liabilities and Contingent Assets Provisions are recognised only when there is a brsent obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements. n) Impairment of assets In accordance with Accounting Standard 28 (AS 28) on ‘Impairment of Assets’ where there is an indication of impairment of the Company’s assets, the carrying amounts of the Company’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 at the higher of its net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognised in the Statement of the Profit and Loss. If at the Balance Sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the lower of recoverable amount and the carrying amount that would have been determined had no impairment loss being recognised. o) Earning per share Basic and diluted earnings per share are computed by dividing the net profit after tax attributable to equity shareholders for the year, with the weighted average number of equity shares outstanding during the year. XIV The brvious year’s figures have been regrouped / rearranged wherever necessary to make it comparable with the current year As per our report of even date For K. S. Aiyar & Co. Chartered Accountants Firm Registration No. 100186W Raghuvir M. Aiyar Partner Membership No 38128 Place : Mumbai date : : 27th April, 2016 Chirayu R. Amin Chairman & CEO Pranav Amin Managing Director Shaunak Amin Managing Director R. K. Baheti Director - Finance & CFO K.G. Ramanathan Director Paresh Saraiya Director Milin Mehta Director Ajay Desai Vice President-Finance & Company Secretary Place : Vadodara date : : 27th April, 2016 |