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Morepen Laboratories
BSE: 500288|NSE: MOREPENLAB|ISIN: INE083A01026|SECTOR: Pharmaceuticals
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Accounting Policy Year : Mar '13
1.  Basis for preparation of Financial Statements
 
 a) Basis for presentation of Financial Statements
 
 The financial statements have been prepared and presented under the
 historical cost convention on an accrual basis of accounting and comply
 with the Accounting Standards as specified in the Companies (Accounting
 Standards) Rules, 2006, other pronouncements of the Institute of
 Chartered Accountants of India, the relevant provisions of the
 Companies Act, 1956 and guidelines issued by the Securities and
 Exchange Board of India, to the extent applicable and as consistently
 applied by the company.
 
 b) Use of Estimates
 
 The presentation of financial statements requires the management of the
 company to make estimates and assumptions that affect the reported
 balances of assets and liabilities and disclosures relating to the
 contingent liabilities as at the date of financial statements and the
 reported amount of income and expenses during the year.  Examples of
 such estimates include provisions for doubtful debts, employee
 benefits, provisions for income taxes, useful life of depreciable
 assets and provisions for impairments.
 
 2.  Fixed assets
 
 a) Fixed assets are stated at cost less depreciation. Capital work in
 progress includes pre-operative expenses.
 
 b) Expenditure incurred on projects / expansion during implementation
 is capitalized and apportioned to various assets on commissioning /
 completion of the same.
 
 3.  Depreciation
 
 a) Depreciation on fixed assets is provided on straight-line method at
 the rates not lower than the rates prescribed by the schedule XIV of
 the Companies Act, 1956 and in the manner as prescribed by it.
 
 b) Cost of leasehold land is not amortized over the period of lease.
 
 4.  Investments
 
 Investments are stated at cost. Provision is made, where, there is a
 permanent fall in the value of investment.
 
 5.  Foreign exchange transactions
 
 Foreign currency liabilities covered by forward contracts/swap
 agreements are stated at the forward contracts/swap agreements rates,
 while those not covered by forward contracts/swap agreements are
 restated at rates ruling at the year-end. Other exchange differences
 are dealt with in the statement of profit and loss.
 
 6.  Valuation of inventories
 
 Stocks of raw materials and other ingredients have been valued on First
 in First Out (FIFO) basis, at cost or net realizable value whichever is
 less, finished goods and stock-in-trade have been valued at lower of
 cost and net realizable value, work-in-progress is valued at raw
 material cost up to the stage of completion, as certified by the
 management on technical basis. Goods in transit are carried at cost.
 
 7.  Revenue Recognition
 
 a) Sales are stated net of returns, excise duty and sales tax.
 
 b) Dividend income is accounted for when the right to receive the same
 is established.
 
 c) Interest on calls-in-arrears on share capital is accounted for as
 and when received.
 
 8.  Excise duty on finished goods
 
 Excise duty is accounted for at the point of manufacture of goods and
 accordingly considered for valuation of finished goods stock lying in
 the factory premises as on the balance sheet date.
 
 9.  Researches and Development
 
 a) Capital expenditure on research and development is included in the
 cost of fixed assets.
 
 b) Revenue expenditure on research and development is charged to the
 statement of profit & loss.
 
 10.  Taxation
 
 The provision for taxation is ascertained on the basis of assessable
 profits computed in accordance with the provisions of the Income Tax
 Act, 1961.
 
 Deferred tax is recognized, subject to the consideration of prudence,
 on timing differences, being the difference between taxable incomes and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods.
 
 11.  Impairment of Assets
 
 The company determines whether there is any indication of impairment of
 carrying amount of company''s assets. The recoverable amounts of such
 assets are estimated, and if any indication exists, impairment loss is
 recognised wherever the carrying amount of assets exceeds its
 recoverable amount.
 
 12.  Provision
 
 A provision is recognised when an enterprise has 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 not discounted
 to its present value and are determined based on management 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
 management estimates.
 
 13.  Earning per share
 
 Basic earning per share is calculated by dividing the net profit or
 loss for the year attributable to the equity shareholders (after
 deducting preference dividends and attributable taxes) by the weighted
 average number of equity shares outstanding during the year.
 
 For the purpose of calculating the diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares. The
 dilutive potential equity shares are deemed converted as at beginning
 of the period, unless they have been issued at a later date.
 
 14.  Employee Retirement benefits
 
 Short term employee benefits
 
 All employee benefits payable/available within twelve months of
 rendering the service are classified as short term employee benefits.
 Benefits such as salaries, wages and bonus etc., are recognised in the
 statement of profit and loss in the period in which the employee
 renders the related service.
 
 Defined benefit plans
 
 Defined benefit plans of the company consist of gratuity and leave
 encashment.
 
 - Gratuity
 
 The company has an obligation towards gratuity, a defined benefit
 retirement plan covering eligible employees. The plan provides for a
 lump sum payment to the vested employees at retirement, death while in
 employment or on termination of employment of an amount based on the
 respective employee''s salary and tenure of employment.  Vesting occurs
 upon completion of five years of service.
 
 - Leave Encashment
 
 As per company''s policy, eligible leaves can be accumulated by the
 employees and carried forward to future periods either to be utilised
 during the service, or encashed. Encashment can be made during the
 service, on early retirement, on withdrawal of scheme, at resignation
 and upon death of the employee. The value of benefit is determined
 based on the seniority and the employee''s salary.
 
 The liability in respect of defined benefit plans is accrued in the
 books of accounts on the basis of actuarial valuation carried out by an
 independent actuary.
 
 Defined contribution plans
 
 Defined contribution plans of the company consist of Provident fund and
 Employees State Insurance.
 
 - Provident Fund & Employees State Insurance (ESI)
 
 The company makes specified monthly contribution towards the employees''
 provident fund & ESI for the eligible employees.
 
 The contribution made to provident fund and ESI are charged to the
 statement of profit and loss as and when these become payable.
Source : Dion Global Solutions Limited
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