Accounting Policies of Gujarat Terce Laboratories Ltd. Company

Mar 31, 2025

Significant Accounting Policies

A summary of the significant accounting policies
applied in the preparation of the financial
statements is given below. These accounting
policies have been applied consistently to all the
periods presented in the financial statements.

1. Property, Plant and Equipment

The cost of property, plant and equipment
comprises its purchase price net of any

trade discounts and rebates, any import
duties and other taxes (other than those
subsequently recoverable from the tax
authorities), any directly attributable
expenditure on making the asset ready for its
intended use, including relevant borrowing
costs for qualifying assets and any expected
costs of decommissioning. Expenditure
incurred after the property, plant and
equipment have been put into operation,
such as repairs and maintenance, are
charged to the Statement of Profit and Loss
in the year in which the costs are incurred.
Major shutdown and overhaul expenditure
is capitalised as the activities undertaken
improves the economic benefits expected
to arise from the asset.

It includes professional fees and, for qualifying
assets, borrowing costs capitalised in
accordance with the Company''s accounting
policy based on Ind AS 23 - Borrowing
costs. Such properties are classified to
the appropriate categories of PPE when
completed and ready for intended use.

Assets in the course of construction are
capitalised in the assets under construction
account. At the point when an asset is
operating at management''s intended use,
the cost of construction is transferred
to the appropriate category of property,
plant and equipment and depreciation
commences. Costs associated with
the commissioning of an asset and any
obligatory decommissioning costs are
capitalised where the asset is available for
use but incapable of operating at normal
levels until a year of commissioning has
been completed. Revenue generated
from production during the trial period
is capitalised.

Property, plant and equipment except
freehold land held for use in the production,
supply or administrative purposes, are
stated in the balance sheet at cost less
accumulated depreciation and accumulated
impairment losses, if any.

The Company has elected to continue with
the carrying value for all of its property,

plant and equipment as recognised in the
financial statements on transition to Ind
AS, measured as per the previous GAAP
and use that as its deemed cost as at the
date of transition.

Subsequent expenditure and
componentisation

Parts of an item of PPE having different
useful lives and significant value and
subsequent expenditure on Property, Plant
and Equipment, arising on account of
capital improvement or other factors, are
accounted for as separate components only
when it is probable that future economic
benefits associated with the item will flow to
the Company and the cost of the item can be
measured reliably. The carrying amount of
any component accounted for as a separate
asset is derecognised when replaced. All
other repairs and maintenance are charged
to profit or loss during the reporting period
in which they are incurred.

Depreciation and useful life

Depreciable amount for assets is the cost
of an asset, or other amount substituted
for cost, less its estimated residual value.
Depreciation is recognised so as to write
off the cost of assets (other than freehold
land and properties under construction)
less their residual values over their useful
lives, using straight-line method as per the
useful life prescribed in Schedule II to the
Companies Act, 2013 except in respect of
following categories of assets, in whose
case the life of the assets has been assessed
as under based on technical advice, taking
into account the nature of the asset, the
estimated usage of the asset, the operating
conditions of the asset, past history of
replacement, anticipated technological
changes, manufacturers warranties and
maintenance support, etc.

Major overhaul costs are depreciated over
the estimated life of the economic benefit
derived from the overhaul. The carrying
amount of the remaining previous overhaul
cost is charged to the Statement of Profit

and Loss if the next overhaul is undertaken
earlier than the previously estimated life of
the economic benefit.

The Company reviews the residual value,
useful lives and depreciation method
annually and, if expectations differ from
previous estimates, the change is accounted
for as a change in accounting estimate on a
prospective basis.

An asset''s carrying amount is written down
immediately to its recoverable value if the
asset''s carrying amount is greater than its
estimated recoverable value.

Derecognition

An item of PPE is de-recognised upon
disposal or when no future economic
benefits are expected to arise from the
continued use of the asset. Any gain or loss
arising on the disposal or retirement of an
item of property, plant and equipment is
determined as the difference between the
sales proceeds and the carrying amount of
the asset and is recognised in Statement of
Profit and Loss.

2. Impairment

At the end of each reporting year, the
Company reviews the carrying amounts of its
tangible and intangible assets to determine
whether there is any indication that those
assets have suffered an impairment loss. If
any such indication exists, the recoverable
value of the asset is estimated in order to
determine the extent of the impairment loss
(if any). Where it is not possible to estimate
the recoverable value of an individual asset,
the Company estimates the recoverable
value of the cash-generating unit to which
the asset belongs. Where a reasonable
and consistent basis of allocation can be
identified, corporate assets are also allocated
to individual cash-generating units, or
otherwise they are allocated to the smallest
group of cash-generating units for which a
reasonable and consistent allocation basis
can be identified.

Recoverable value is the higher of fair
value less costs to sell and value in use. In
assessing value in use, the estimated future
cash flows are discounted to their present
value using a pre-tax discount rate that
reflects current market assessments of the
time value of money and the risks specific
to the asset for which the estimates of future
cash flows have not been adjusted.

An impairment loss is recognised immediately
in the Statement of Profit and Loss.

3. Inventories
Raw Materials

Raw materials are stated at cost, which
comprises cost of purchases. Where a
decline in the price of materials indicates
that the cost of the finished products
exceeds net realisable value, the materials
are written down to net realisable value. In
such circumstances, the replacement cost
of the materials may be the best available
measure of their net realisable value.

Work-in-Progress and Finished Goods

Cost of work-in-progress and finished
goods comprises direct materials, direct
labour and an appropriate proportion of
variable and fixed overhead expenditure.
Fixed overheads are allocated on the
basis of normal operating capacity. Cost
of inventories also include all other costs
incurred in bringing the inventories to
their present location and condition. Cost
includes the reclassification from equity
of any gains or losses on qualifying cash
flow hedges relating to purchases of raw
material. Costs are assigned to the individual
items in a group of inventories on the basis
of weighted average cost basis. Costs of
purchased inventory are determined after
deducting rebates and discounts. Net
realisable value is the estimated selling
price in the ordinary course of business less
the estimated costs of completion and the
estimated costs necessary to make the sale.

Costs of inventories are determined on
weighted average basis. Net realisable

value represents the estimated selling
price for inventories less all estimated
costs of completion and costs necessary
to make the sale.

Stores and Spares

Inventory of stores and spare parts is valued
at weighted average cost or net realisable
value, whichever is lower. Provisions
are made for obsolete and non-moving
inventories. Unserviceable and scrap items,
when determined, are valued at estimated
net realisable value.

4. Non-current Assets held-for-sale and
Discontinued Operations

Non-current Assets held-for-sale.

Non-current assets or disposal groups are
classified as held for sale if their carrying
amounts will be recovered principally
through a sale transaction rather than
through continuing use.

Such assets or disposal groups are classified
only when both the conditions are satisfied:

• The sale is highly probable; and

• The asset or disposal group is available
for immediate sale in its present
condition, subject only to terms that
are usual and customary for sale
of such assets.

Management must be committed to the
sale, which should be expected to qualify
for recognition as a completed sale within
one year from the date of classification
as held for sale, and actions required to
complete the plan of sale should indicate
that it is unlikely that significant changes to
the plan will be made or that the plan will be
withdrawn. Non-current assets or disposal
group are presented separately from the
other assets in the balance sheet. The
liabilities of a disposal group classified as
held for sale are presented separately from
other liabilities in the balance sheet.

Upon classification, non-current assets or
disposal group held for sale are measured
at the lower of carrying amount and fair

value less costs to sell. Non-current assets
which are subject to depreciation are not
depreciated or amortized once those
classified as held for sale.

Discontinued Operations

A discontinued operation is a component
of the entity that has been disposed of
or is classified as held for sale and that
represents a separate major line of business
or geographical area of operations, is part
of a single co-ordinated plan to dispose of
such a line of business or area of operations,
or is a subsidiary acquired exclusively with a
view to resale. The results of discontinued
operations are presented separately in the
statement of profit and loss.

5. Revenue Recognition
Sale of Goods

Revenue is measured at the fair value of the
consideration received or receivable. The
Company recognises revenues on sale of
products, net of discounts, sales incentives,
rebates granted, returns, sales taxes/GST
and duties when the products are delivered
to customer or when delivered to a carrier
for export sale, which is when title and
risk and rewards of ownership pass to the
customer. Export incentives are recognised
as income as per the terms of the scheme in
respect of the exports made and included
as part of export turnover.

Revenue from sales is recognised when
control of the products has transferred,
being when the products are delivered
to the customer, the customer has full
discretion over the channel and price to
sell / consume the products, and there is
no unfulfilled obligation that could affect
the customer''s acceptance of the products.
Delivery occurs when the products have
been shipped to the specific location, the
risks of obsolescence and loss have been
transferred to the customer, and either the
customer has accepted the products in
accordance with the sales contract or the
acceptance provisions have lapsed.

Interest Income

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts
through the expected life of the financial
asset to that asset''s net carrying amount on
initial recognition.

6. Foreign Exchange Translation

The functional currency of the Company is
Indian Rupees which represents the currency
of the primary economic environment in
which it operates.

Foreign currency transactions are
translated into the functional currency
using the exchange rates at the dates of
the transactions. Foreign exchange gains
and losses resulting from the settlement of
such transactions are generally recognised
in profit or loss. Monetary balances arising
from the transactions denominated in
foreign currency are translated to functional
currency using the exchange rate as on the
reporting date. Any gains or loss on such
translation, are generally recognised in
profit or loss.

Exchange differences on monetary items
are recognised in Statement of Profit and
Loss in the year in which they arise except
for exchange differences on foreign
currency borrowings relating to assets
under construction for future productive
use, which are included in the cost of
those assets when they are regarded as
an adjustment to interest costs on those
foreign currency borrowings.

Foreign exchange differences regarded
as an adjustment to borrowing costs are
presented in the Statement of Profit and
Loss, within finance costs. All other foreign
exchange gains and losses are presented in

the Statement of Profit and Loss on a net
basis within other gains/dosses).

7. Income Taxes

The income tax expense or credit for
the period is the tax payable on the
current period''s taxable income based
on the applicable income tax rate for
each jurisdiction adjusted by changes
in deferred tax assets and liabilities
attributable to temporary differences and to
unused tax losses.

Current Tax

The tax currently payable is based on
taxable profit for the year. Taxable profit
differs from ''profit before tax'' as reported in
the Statement of Profit and Loss because of
items of income or expense that are taxable
or deductible in other years and items
that are never taxable or deductible. The
Company''s current tax is calculated using
tax rates and laws that have been enacted
or substantively enacted by the end of the
reporting period.

In respect of the provisions relating to
Minimum Alternate Tax (MAT), the company
has availed of the benefit of reduced tax rate
u/s 115BAA of the Income Tax Act, 1961,
pursuant to which, the company is no longer
required to pay the MAT on its income.

Deferred Tax

Deferred tax is recognised on temporary
differences between the carrying amounts
of assets and liabilities in the Financial
Statements and the corresponding tax
bases used in the computation of taxable
profit. Deferred tax liabilities are generally
recognised for all taxable temporary
differences. Deferred tax assets are
generally recognised for all deductible
temporary differences to the extent that it is
probable that taxable profits will be available
against which those deductible temporary
differences can be utilised. Such deferred
tax assets and liabilities are not recognised
if the temporary difference arises from the
initial recognition (other than in a business

combination) of assets and liabilities in a
transaction that affects neither the taxable
profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if
the temporary difference arises from the
initial recognition of goodwill.

The carrying amount of deferred tax assets
is reviewed at each reporting date and
reduced to the extent that it is no longer
probable that sufficient taxable profit will be
available to allow all or part of the deferred
tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each
reporting date and are recognised to the
extent that it has become probable that
future taxable profits will allow the deferred
tax asset to be recovered.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in Other Comprehensive
Income or directly in equity.

Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority. Current tax assets
and tax liabilities are offset where the entity
has a legally enforceable right to offset and
intends either to settle on a net basis, or
to realise the asset and settle the liability
simultaneously.

8. Borrowing Costs

Borrowing costs, general or specific, that
are directly attributable to the acquisition
or construction of qualifying assets is
capitalized as part of such assets. A
qualifying asset is one that necessarily
takes substantial period of time to get

ready for intended use. AH other borrowing
costs are charged to the Statement of
Profit and Loss.

The Company determines the amount of
borrowing costs eligible for capitalisation
as the actual borrowing costs incurred on
that borrowing during the year less any
interest income earned on temporary
investment of specific borrowings pending
their expenditure on qualifying assets, to
the extent that an entity borrows funds
specifically for the purpose of obtaining
a qualifying asset. In case if the Company
borrows generally and uses the funds for
obtaining a qualifying asset, borrowing costs
eligible for capitalisation are determined
by applying a capitalisation rate to the
expenditures on that asset.

Borrowing cost includes exchange
differences arising from foreign currency
borrowings to the extent they are regarded
as an adjustment to the finance cost.

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Mar 31, 2024

Significant Accounting Policies

A summary of the significant accounting policies applied in the preparation of the financial statements is given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

1. Property, Plant and Equipment

The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit and Loss in the year in which the costs are incurred. Major shutdown and overhaul expenditure is capitalised as the activities undertaken improves the economic benefits expected to arise from the asset.

It includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy based on Ind AS 23 - Borrowing costs. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use.

Assets in the course of construction are capitalised in the assets under construction account. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category of property, plant and

equipment and depreciation commences. Costs associated with the commissioning of an asset and any obligatory decommissioning costs are capitalised where the asset is available for use but incapable of operating at normal levels until a year of commissioning has been completed. Revenue generated from production during the trial period is capitalised.

Property, plant and equipment except freehold land held for use in the production, supply or administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses, if any.

The Company has elected to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements on transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Subsequent expenditure and componentisation

Parts of an item of PPE having different useful lives and significant value and subsequent expenditure on Property, Plant and Equipment arising on account of capital improvement or other factors, are accounted for as separate components only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation and useful life

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using straight-line method as per the useful life prescribed in Schedule II to the Companies Act 2013 except in respect of following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of

replacement anticipated technological changes, manufacturers warranties and maintenance support, etc.

Major overhaul costs are depreciated over the estimated life of the economic benefit derived from the overhaul. The carrying amount of the remaining previous overhaul cost is charged to the Statement of Profit and Loss if the next overhaul is undertaken earlier than the previously estimated life of the economic benefit.

The Company reviews the residual value, useful lives and depreciation method annually and, if expectations differ from previous estimates, the change is accounted for as a change in accounting estimate on a prospective basis.

An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable value.

Derecognition

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.

2. Impairment

At the end of each reporting year, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable value of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable value of an individual asset, the Company estimates the recoverable value of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable value is the higher of fair value less costs to sell and value in use. In assessing value in

use. theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

An impairment loss is recognised immediately in the Statement of Profit and Loss.

3. Inventories Raw Materials

Raw materials are stated at cost, which comprises cost of purchases. Where a decline in the price of materials indicates that the cost of the finished products exceeds net realisable value, the materials are written down to net realisable value. In such circumstances, the replacement cost of the materials may be the best available measure of their net realisable value.

Work-in-Progress and Finished Goods Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure. Fixed overheads are allocated on the basis of normal operating capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost includes the reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material. Costs are assigned to the individual items in a group of inventories on the basis of weighted average cost basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Costs of inventories are determined on weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Stores and Spares

Inventory of stores and spare parts is valued at weighted average cost or net realisable value, whichever is lower. Provisions are made for obsolete and non-moving inventories. Unserviceable and scrap items, when determined, are valued at estimated net realisable value.

4. Non-current Assets held-for-sale and Discontinued Operations

Non-current Assets held-for-sale

Non-current assets or disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use.

Such assets or disposal groups are classified only when both the conditions are satisfied:

• The sale is highly probable; and

• The asset or disposal group is available for immediate sale in its present condition, subject only to terms that are usual and customary for sale of such assets.

Ma nagement must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale, and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Noncurrent assets or disposal group are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

Upon classification, non-current assets or disposal group held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets which are subject to depreciation are not depreciated or amortized once those classified as held for sale. Discontinued Operations

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit and loss.

5. Revenue Recognition Sale of Goods

Revenue is measured at the fair value of the consideration received or receivable. The Company recognises revenues on sale of

products, net of discounts, sales incentives, rebates granted, returns, sales taxes/GST and duties when the products are delivered to customer or when delivered to a carrier for export sale, which is when title and risk and rewards of ownership pass to the customer. Export incentives are recognised as income as per the terms of the scheme in respect of the exports made and included as part of export turnover.

Revenue from sales is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell / consume the products, and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract or the acceptance provisions have lapsed.

Interest Income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

6. Foreign Exchange Translation

The functional currency of the Company is Indian Rupees which represents the currency of the primary economic environment in which it operates.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are generally recognised in profit or loss. Monetary balances arising from the transactions denominated in foreign currency are translated to functional currency using the exchange rate as on the reporting date. Any gains or loss on such translation, are generally recognised in profit or loss.

Exchange differences on monetary items are recognised in Statement of Profit and Loss in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use. which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other gains/flosses).

7. Income Taxes

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the end of the reporting period In respect of the provisions relating to Minimum Alternate Tax (MAT), the company has availed of the benefit of reduced tax rateu/s 115BAA of the Income Tax Act, 1961, pursuant to which, the company is no longer required to pay the MAT on its income. Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which

those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

8. Borrowing Costs

Borrowing costs, general or specific, that are directly attributable to the acquisition or construction of qualifying assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

The Company determines the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the year less any interest income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets, to the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset. In case if the Company borrows generally and uses the funds for obtaining a qualifying asset, borrowing costs eligible for capitalisation are determined by applying a capitalisation rate to the expenditures on that asset.

Borrowing cost includes exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the finance cost.

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Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Revenue recognition

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Interest income is accounted on accrual basis.

1.4 Expenditure

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

1.5 Fixed assets

Fixed assets are carried at cost less accumulated depreciation 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. 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 previously assessed standard of performance.

1.6 Investments

Investments are classified as long term investments. It is carried at cost. Provision for diminution in value of long term investment is made on each investment individually only if such decline is other than temporary.

1.7 Inventories

Inventories are valued as under Raw Material: At Cost Stock in Process: At estimated Cost Finished Goods: At cost or realizable value whichever is less Stores, Spares & other items: At Cost

1.8 Raw Material is accounted net of Excise Duty.

1.9 Cash and cash equivalents.

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition).

1.10 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.11 Depreciation

Depreciation has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

1.12 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised only if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets, if any.

1.13 Excise Duty / Service Tax and Sales Tax / Value Added Tax

Excise duty on Finished Goods is accounted as and when they are cleared from the factory premises. Sales Tax / Value Added Tax is charged to the Statement of Profit and Loss.

Company has adopted method of treatment of Cenvat Credit in account as prescribed in guidance note on accounting treatment for CENVAT by ICAI. Excise Duty paid on inputs is debited to Cenvat credit receivable account, so the Purchase cost of inputs (Raw Material) is net of Excise duty. Therefore the inputs consumed (Raw Material) and the inventory of inputs (Raw Material) is valued on the basis of purchase cost net of Excise duty. The debit balance in Cenvat credit receivable account is shown on the Assets side under the head "Short Term Loans & Advances"

1.14 Foreign currency transactions and translations

Current assets and current liabilities are translated at the exchange rate prevailing on the last day of the year.

Gains or losses arising out of remittance/ translations at the year end are credited / debited to the profit and loss account for the year except in cases where they relate to acquisition of Fixed Assets, in which case they are adjusted to carrying cost of such assets

Foreign Exchange transactions are converted into Indian rupees at the prevailing rate on the date of the transaction.

Exchange differences arising on contracts are recognized in the period in which they arise and the premium paid / received is accounted as expense/ income over the period of contract.

1.15 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences, if any arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.16 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid, if any, in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.17 Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

1.18 Contingent Liabilities and Provisions

A provision is recognised when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the 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. Contingent liabilities are disclosed in the Notes.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Revenue recognition

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Interest income is accounted on accrual basis.

1.4 Expenditure

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

1.5 Fixed assets

Fixed assets are carried at cost less accumulated depreciation 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. 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 previously assessed standard of performance.

1.6 Investments

Investments are classified as long term investments. It is carried at cost. Provision for diminution in value of long term investment is made on each investment individually only if such decline is other than temporary.

1.7 Inventories

Inventories are valued as under Raw Material: At CostStock in Process: At estimated CostFinished Goods: At cost or realizable value whichever is lessStores, Spares & other items: At Cost

1.8 Raw Material is accounted net of Excise Duty.

1.9 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition).

1.10 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.11 Depreciation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

1.12 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised only for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets, if any.

1.13 Excise Duty / Service Tax and Sales Tax / Value Added Tax

Excise duty on Finished Goods is accounted as and when they are cleared from the factory premises. Sales Tax / Value Added Tax is charged to the Staement of Profit and Loss.

Company has adopted method of treatment of Cenvat Credit in account as prescribed in guidance note on accounting treatment for CENVAT by ICAI. Excise Duty paid on inputs is debited to Cenvat credit receivable account, so the Purchase cost of inputs (Raw Material) is net of Excise duty. Therefore the inputs consumed (Raw Material) and the inventory of inputs (Raw Material) is valued on the basis of purchase cost net of Excise duty. The debit balance in Cenvat credit receivable account is shown on the Assets side under the head "Short Term Loans & Advances"

1.14 Foreign currency transactions and translations

Current assets and current liabilities are translated at the exchange rate prevailing on the last day of the year.

Gains or losses arising out of remittance/ translations at the year end are credited / debited to the profit and loss account for the year except in cases where they relate to acquisition of Fixed Assets, in which case they are adjusted to carrying cost of such assets Foreign Exchange transactions are converted into Indian rupees at the prevailing rate on the date of the transaction.

Exchange differences arising on contracts are recognized in the period in which they arise and the premium paid / received is accounted as expense/ income over the period of contract.

1.15 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences, if any arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.16 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid, if any, in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.17 Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

1.18 Contingent Liabilities and Provisions

A provision is recognised when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the 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. Contingent liabilities are disclosed in the Notes.

1.19 Sundry Creditors, Sundry Debtors, Deposits, Loans & Advances recoverable in Cash or kind are subject to confirmation.

1.20 Balances in Share Allotment money, EEFC account and current account with Bank of Baroda is subject to reconciliation. It is taken on the basis of balances as per the books of the Company, as the Statement and certificates are not provided by the Bank.

1.21 None of the employees of the Company was in receipt of or entitled to receive emoluments in aggregate at a rate of Rs. 200000/- p.m. or more (P.Y. - Rs. 200000/- p.m.) (If employed for part of the year) or Rs. 2400000/- or more p.a. (P.Y. - Rs. 2400000/- or more p.a.) (If employed for full year) (Previous Year - Nil).

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Mar 31, 2010

A) Basis for preparation of Financial Statements

The financial statements have been prepared under historical cost convention on accrual basis in compliance with all material aspect of the applicable Accounting Standards in India and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company, and are consistent with those used in the previous year.

b) Income Recognition

All Income are accounted for on accrual basis. Sales are accounted including Sales Tax.

c) Expenditure

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities. Gratuity is accounted*on payment basis or as and when the liability to pay arises, whichever event occurs earlier.

d) Fixed Assets

Fixed Assets are stated at cost of acquisition less the accumulated depreciation and impairment of loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

e) Depredation

Depreciation-on Fixed assets has been provided under the Straight line method as per rates prescribed in Schedule XIV of the Companies Act, 1956.

f) Investments

Investments are classified as long term investments. It is carried at cost. Provision for diminution in value of long term investment is made on each investment individually only if such decline is other than temporary.

g) Inventories

Inventories are valued as under

Raw Material : At Cost

Stock in Process : At estimated Cost

Finished Goods : At cost or realisable value whichever is less

Stores, Spares & other items : At Cost

h) Raw Material Raw Material is accounted net of Excise Duty.

i) Miscellaneous Expenditure

Expenditure incurred for the Product Launching and Market Development to develop the new market division of Central U.P. and Madhya Pradesh are treated as deferred revenue expenditure as it have enduring benefits. The management envisage the enduring benefits from Product Launching to the business for five years and from Market Development for two years, it is amortized over a period of five years and two years respectively from the year of expenditure.

j) Foreign Currency Transactions

The foreign currency balances receivable/ payable as at the year end for the current year transactions are converted at the closing rate. Following the principles of conservatism, the management does not consider the profit of exchange rate fluctuation on outstanding balances for more than one year.

k) Taxes on Income

Tax expense comprises of current and deferred. For the previous year it also includes fringe benefit tax.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the income tax act, 1961.

The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax , rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognized only if there is virtual certainty that such deferred tax asset can be realized against future taxable profits.

l) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceed its recoverable value. An impairment loss, if any is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prioryears is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

m) Borrowing Costs

Borrowing costs attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such assets are ready for its intended use.

Other borrowing costs are charged to the profit and loss account.

n) Contingent Liabilities and Provisions

Contingent liabilities are possible but not probable obligations as on the balance sheet date based on the available evidence. Provisions are recognized when there is a present obligation as a result of past event; and 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 determined based on best estimate required to settle the obligation at the balance sheet date.