The Company is engaged in manufacturing a range of Oral and Dental
products for elite national and international brands. The main
portfolio of the Company is to carry out manufacturing, exporting,
importing and trading of oral care/ hygiene products including
toothbrushes and toothpastes mouthwash, Denture tablets, sanitizers
1. Basis of preparation of Financial Statements
The Financial Statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provision of the Companies Act, 1956 and guidelines issued by
Securities and Exchange Board of India, to the extent applicable. The
Financial Statements have been prepared under the historical cost
convention on accrual basis. The accounting policies have been
constantly applied by the Company.
2. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities on the date of the financial statements, revenue and
expenses during the reporting period. Although such estimates and
assumptions are made on reasonable and prudent basis taking into
account all available information, actual results could differ from
these estimates and assumptions and such differences are recognised in
the period in which the results are crystallised.
3. Fixed Assets and Depreciation
a) Fixed Assets are stated at cost of acquisition, which is inclusive
of taxes, freight, installation and allocated incidental expenditure
during construction/ acquisition and exclusive of CENVAT Credit is
available to the Company.
b) Advances paid towards the acquisition of fixed assets outstanding at
balance sheet date and the cost of fixed assets not put to use before
such date are disclosed under the head Capital Work-in-Progress.
c) Depreciation on fixed assets, except intangibles is provided at
minimum rates prescribed in Schedule XIV of the Companies Act, 1956 on
straight line basis on pro rata basis from the respective number of
days after addition/ before discard or sale of fixed assets by leaving
residual value of Re.1 except that moulds and dies are depreciated over
the useful life of 5 Years as estimated by the management.
d) Individual assets costing Rs.5,000 or less are fully depreciated in
the year of purchase.
e) Intangible assets comprise of Computer Software and are amortised
over a period of five years. All costs relating to up gradation
/enhancements are generally charged off as revenue expenditure unless
they bring significant additional benefits of enduring nature.
4. Impairment of Assets
An asset is treated as impaired when carrying cost of assets exceeds
its recoverable amount. An impairment loss is charged to the profit and
loss account when asset is identified as impaired. Reversal of
impairment loss recognised in prior periods is recorded when there is
an indication that impairment loss recognised for the assets no longer
exists or has decreased. An impairment loss is reversed only to the
extent that the asset''s carrying amount does not exceed the carrying
amount that would have been determined net of depreciation or
amortised, if no impairment loss has been recognised Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life. The Company periodically assesses using
external and internal resources whether there is an indication that an
asset may be impaired.
a) Raw materials, packaging materials and stores & spare parts are
carried at cost. Cost includes purchase price, (excluding those
subsequently recoverable by the enterprise from the concerned revenue
authorities), freight inwards and other expenditure incurred in
bringing such inventories to their present location and condition. In
determining the cost, weighted average cost method is used. The
carrying cost of raw materials, packaging materials and stores and
spare parts are appropriately written down when there is a decline in
replacement cost of such materials and finished products in which these
will be incorporated are expected to sell below cost.
b) Work in progress, manufactured finished goods and traded goods are
valued at the lower of cost and net realisable value. The comparison of
cost and net realisable value is made on an item by item basis. Cost of
work in progress and manufactured finished goods is determined on the
weighted average basis and comprises direct material, cost of
conversion and other costs incurred in bringing these inventories to
their present location and condition. Cost of traded goods is
determined on a weighted average basis. Finished products and work in
progress includes appropriate production overheads.
c) Excise duty liability is included in the valuation of closing
inventory of finished goods. Excise duty payable on finished goods is
accounted for upon manufacture and transfer of finished goods to the
stores. Payment of excise duty is deferred till the clearance of goods
from the factory premises.
6. Revenue recognition
a) Revenue from sale of goods is recognised on transfer of significant
risk and rewards of ownership to the customer. Revenue includes excise
duty and is net of Sales Tax, Value Added Tax and applicable discounts
b) Interest income from deposits is recognised on accrual basis.
c) Dividend is recognised when the right to receive of the same is
d) Export incentives principally comprise of Duty Entitlement Pass Book
Scheme (DEPB). The benefit under these incentive schemes are available
based on the guideline formulated for respective schemes by the
government authorities. DEPB is recognised as revenue on accrual basis
to the extent it is probable that realisation is certain.
7. Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or
construction or production of qualifying assets are capitalised as part
of the cost 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 recognised as an expense in the period in
which they are incurred and charged to revenue.
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable capital asset, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset, and
in other cases, are accumulated in a Foreign Currency Monetary Item
Translation Difference Account in the enterprise''s financial
statements and amortised over the balance period of such long-term
asset/liability but not beyond accounting period ending on or before
March 31, 2011
Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognised as
income or as expenses in the year in which they arise.
When there is a change in the classification of a foreign operation,
the translation procedures applicable to the revised classification are
applied from the date of the change in the classification.
Investments are valued as per AS – 13 Accounting for Investments.
Investments that are readily realisable and are intended to be held for
not more than One year are classified as current investments. All other
investments are classified as long-term investments, even though they
may be readily marketable. The cost of an investment includes
acquisition charges such as brokerage, fees and duties.
Current investments are carried at lower of cost and fair value
determined on an individual investment basis.
Long-term investments including investments in subsidiaries are carried
at cost. However, provision for diminution in value is made to
recognise a decline other than temporary in the value of the
9. Employee Benefits
a) Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as Short term employee benefits. Benefits
such as salaries, wages, short term compensated absence and bonus etc
are recognised in the Profit and Loss Account in the period in which
the employee renders the related service.
b) Post employment benefits:
I. Defined contribution plans:
Provident Fund Contribution: In accordance with the provisions of the
Employees Provident Funds and Miscellaneous Provisions Act, 1952,
eligible employees of the Company are entitled to receive benefits with
respect to provident fund, a defined contribution plan in which both
the Company and the employee contribute monthly at a determined rate
(currently 12% of employee''s basic salary). Company''s contribution to
Provident Fund is charged to the Profit and Loss Account.
Employee State Insurance Contribution: The Contributions for Employee
State Insurance Contribution are deposited with the appropriate
government authorities and are recognised in the Profit & Loss Account
in the financial year to which they relate and there is no further
obligation in this regard.
II. Defined Benefit Plans:
Gratuity: The Company provides for retirement benefits in the form of
Gratuity. The Company''s gratuity plan is a defined benefit plan. The
present value of gratuity obligation under such defined plan is
determined based on an actuarial valuation carried out by an
independent actuary using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation. The obligation is measured at the present
value of the estimated future cash flows. The discount rate used for
determining the present value of the obligation under the defined
benefit plans, is based on the market yields on Government securities
as at the valuation date having maturity periods approximating to the
terms of the related obligations. Actuarial gains and losses are
recognised immediately in the profit and loss account.
10. Accounting for taxes on income
a) Tax expenses comprises of Current Tax, Deferred Tax and Wealth 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.
b) Deferred Income Tax reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred Tax is
measured based on the tax rates and the tax law enacted or
substantially enacted at the balance sheet date. Deferred tax assets
are recognised only to the extent there is reasonable certainty that
sufficient future taxable income will be available against which these
assets can be realised in future where as in cases of existence of
carry forward of losses or unabsorbed depreciation, deferred tax assets
are recognised only if there is virtual certainty of realisation backed
by convincing evidence. Deferred tax assets are reviewed at each
balance sheet date.
c) Minimum Alternative Tax (MAT) payable under the provisions of the
Income-tax Act, 1961 is recognised as an assets in the year in which
credit become eligible and is set off to the extent allowed in the year
in which the entity becomes liable to pay income tax at the enacted tax
11. Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities are not recognised but are disclosed in the
notes to accounts. Payment in respect of such Contingent liabilities,
if any, is shown as balance with Statutory Authorities under head loans
and advances, till the final outcome of the matter.
Contingent Assets are neither recognised nor disclosed in the financial
Provisions are recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle obligation(s), in respect of which estimate
can be made for the amount of obligation. Provisions are not discounted
to its present value. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
12. Earnings per share
Basic Earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders after tax (and
including post tax effect of any extra-ordinary item) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the period,
are adjusted for events of bonus issue to existing shareholders.
For the purpose of calculating diluted earnings per share, the net
profit or loss attributable to equity shareholders and the weighted
average number of shares outstanding are adjusted for the effects of
all dilutive potential equity shares, if any, except when the results
would be anti- dilutive.
a) Operating lease As Lessee
Lease arrangements, where the risks and rewards incidental to ownership
of an asset substantially vest with the lesser, are recognised as an
operating lease. Lease payments under operating lease are recognised as
an expense in the Profit and Loss Account on a straight-line basis over
the lease period.
The assets given under operating lease are shown in the Balance Sheet
under fixed assets and depreciated on a basis consistent with the
depreciation policy of the Company. The lease income is recognised in
the Profit and Loss Account on a straight-line basis over the lease
b) Finance lease
Assets taken on finance lease are capitalised at an amount equal to the
fair value of the leased assets or the present value of minimum lease
payments at the inception of the lease, whichever is lower. Such leased
assets are depreciated over the lease tenure or the useful life,
whichever is shorter. The lease payment is apportioned between the
finance charges and reduction of outstanding liability. The finance
charge is allocated to the periods over the lease tenure to produce a
constant periodic rate of interest on the remaining liability.
14. Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profits
before tax is adjusted for the effect of transaction of non-cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, investing and
financing activities are segregated.