(a) Basis of Accounting:
These Accounts have been prepared under the historical cost convention
on an accrual basis and comply with the Accounting Standards referred
to in Section 211(3C) of the Companies Act, 1956, of India (the Act).
(b) Fixed Assets and Depreciation/Amortisation:
Fixed assets are stated at cost of acquisition less accumulated
depreciation Cost of acquisition is inclusive of all attributable cost
of bringing the fixed asset to their working condition. When assets are
retired or otherwise disposed off, the cost of such assets and the
related accumulated depreciation are removed from the accounts. Any
profit or loss on retirement, or other disposition is reflected in the
Profit and Loss Account.
Depreciation on fixed assets is provided on a pro-rata basis, on
straight line method, at the rates prescribed under Schedule XIV to the
Act, except in respect of certain assets, which are depreciated based
on the useful lives estimated by the Management, as stated below:
Assets Useful Lives
Moulds and Dies 3 Years
Medical Equipment (including assets given on lease) 8 Years
Information Technology related assets 3 Years
Vehicles 3 Years
The useful lives of the assets are based on technical estimates
approved by the Management, and are lower than the implied useful lives
arrived on the basis of the rates prescribed under Schedule XIV to the
Act. Assets individually costing less than Rs. 5,000 are fully
depreciated in the year of acquisition.
Leasehold Land is being amortised over the period of lease.
Long-term investments are valued at cost. Provision is made in case of
permanent diminution in the value of long-term investments. Short-term
investments are valued at lower of cost and market value/net asset
Inventories are valued at lower of cost (ascertained on
first-in-first-out basis) and net realisable value, except spares which
are charged to the Profit and Loss Account on its purchase. Cost for
Work-in-Progress and Finished Goods includes raw material cost,
estimated cost of conversion and other costs incurred in bringing the
inventories to their present location and condition.
(e) Retirement Benefits:
The Company has various schemes of retirement benefits and the
Companys contributions are charged to Profit and Loss Account.
(I) In case of Provident Fund, payments are made to the relevant
(II) In case of Superannuation, the amounts are funded through the
Superannuation scheme of the Life Insurance Corporation of India.
(III) In case of Gratuity, payments are made to the Trustees of the
Companys Gratuity Fund on the basis of an actuarial valuation.
The Company provides for Unutilised Privilege Leave and Retirement
Ex-gratia Liability based on acturial valuation carried out by an
Sales are net of sales tax, trade and other discounts.
(g) Taxes on Income:
(I) The Company provides for taxes on income, on the tax payable
(II) Deferred tax arising from timing differences between book and tax
profits is accounted for under the liability method, at the applicable
rate of tax, to the extent that the timing differences are expected to
crystallise/capable of reversal as deferred tax charge/benefit in the
Profit and Loss Account and as deferred tax liability/asset in the
(h) Foreign Currency Transactions:
Transactions in foreign currencies are accounted at `approximate
exchange rates prevalent on the transaction date. Gains and losses
arising out of subsequent fluctuations are accounted for on actual
payment/realisation. Exchange differences arising therefrom is taken
to the Profit and Loss Account, except in relation to purchase of fixed
assets, wherein the exchange difference is adjusted in the carrying
cost of the assets. The foreign currency denominated current assets and
liabilities are restated at the exchange rate prevailing on the Balance
Sheet date, and the resultant exchange gain or loss is recognised in
the Profit and Loss Account.
(I) Assets acquired under leases where a significant portion of the
risks and rewards of ownership are retained by the lessor are
classified as operating leases. Lease rentals are charged to the Profit
and Loss Account on accrual basis.
(II) Assets leased out under operating leases are capitalised. Rental
income is recognised on accrual basis over the lease term. Initial
direct costs relating to assets given on operating leases are charged
to Profit and Loss Account.