Notes to Financial Statements 1. Significant Accounting Policies a. Basis of brparation of Financial Statements The accompanying financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the basis of a going concern basis, while revenue, expenses, assets and Liabilities accounted/recognized on accrual basis. GAAP comprises mandatory accounting as brscribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI) Accounting policies are consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis. b. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the required amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and revenue can be reliably measured. d. Fixed Assets Fixed Assets are stated at cost less accumulated debrciation. Cost comprises the purchase price, freight, duties, taxes and any attributable cost of bringing the asset to its working condition for its intended use. e. Debrciation Debrciation on fixed assets has been provided on written down value method based on useful life of asset specified in Schedule II of the Companies Act, 2013 on pro-rata basis. f. Borrowing costs: Borrowing costs that are directly attributable to the acquisition or the construction of a qualifying asset is capitalized for the period until the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time i.e more than 12 months to get ready for intended use. All other borrowing costs are charged to revenues g. Inventories Materials are valued at the lower of cost and estimated net realizable value.Net realizable value is the estimated selling price in the ordinary course of business, reduced by the estimated costs of completion and costs to affect the sale. h. Income Tax i. Current tax: Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. ii. Deferred tax: Deferred income taxes is recognized, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Where the Company has carry forward of unabsorbed debrciation or tax losses deferred tax assets are recognized only if it is virtually certain backed by convincing evidence that such deferred tax assets can be realized against future taxable profits. i. Earnings per share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. j. Provisions A Provision is recognized when the Company has a brsent obligation as a result of past event i.e it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. k. Cash Flow Statement: Cash Flow Statement has been brpared under indirect method as per the Accounting Standard-3 "Cash Flow Statement" I. Cash and cash equivalents Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. 2. Balances under trade receivable and trade payables are subjected to confirmation and reconciliation from respective parties and the classification / grouping of the parties under sundry debtors and creditors are as per the management rebrsentation. Grouping of parties are effected the extent of value of sundry debtors and creditors in the financials. 3. Segment Reporting There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - 'Segment Reporting' issued by the Institute of Chartered Accountants of India as the company operates only in the areas of Pharmaciticals formulations only Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.Notes on financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement. For MM REDDY & CO., Chartered Accountants Firm Registration Number: 010371S Sd/- M Madhusudhana Reddy Parther Membership No. 213077 For and on behalf of the Board of Directors of Concord Drugs Limited Sd/- Nagi Reddy Seelam Managing Director Sd/- Koni Reddy Seelam Director Place: Hyderabad Date: 30/05/2015 |