1. Basis for preparation of financial statements
I) The financial statements of Nectar Lifesciences Limited ( the
Company ) have been prepared and presented to comply with the
historical cost conventions in accordance with the Indian Generally
Accepted Accounting Principles (GAAP), mandatory Accounting Standards
referred to in the Companies (Accounting Standards) Rule 2006 issued by
the Central Government in exercise of the power conferred under
sub-section (1) (a) of Section 642 read with sub section (3C) of
Section 211 & sub-section (1) of Section 210 A to the extent applicable
and the provisions of the Companies Act, 1956 and on the basis of going
ii) All the Incomes & Expenditures are recognized on accrual basis.
2. Fixed Assets and Depreciation
i) Fixed Assets have been stated at cost net of Cenvat/Value Added Tax
availed, but inclusive of attributable costs of bringing the asset to
their working condition for their intended use less depreciation and
impairment loss, if any.
ii) Depreciation on fixed assets is provided on straight-line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
iii) Cost of leasehold assets is amortized over the period of the
Investments are classified into current and non current investments.
Non current Investments are stated at cost and provision for diminution
in value is made if decline is other than temporary in the opinion of
the management. Current Investments are valued at cost and provision is
made for decline in market value.
I. Raw materials, Stores and Spares and Packing material
Lower of Cost and Net Realizable Value. Cost of inventory comprises all
cost of purchase and other cost incurred in bringing the inventories to
their present location and condition.
ii. Finished Goods and work in process
Lower of Cost and Net Realizable Value. Cost includes direct material,
labour and proportionate of manufacturing overheads. Cost of finished
goods includes excise duty.
iii. Traded goods
Lower of Cost and Net Realizable Value. Cost includes the purchase
price and other associated costs directly incurred in bringing the
inventory to its present location.
Net reliazable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
5. Foreign Exchange Transactions
a. Initial Recognition
Investments in foreign entities are recorded at the exchange rate
prevailing on the date of making the investment. Transactions
denominated in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies, as
at the balance sheet date, not covered by forward exchange contracts,
are translated at year end rates.
c. Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting company''s monetary items at rates different from those at
which they were initially recorded during the year, or reported in the
previous financial statements, are recognized as income or expense in
the year in which they arise. The exchange difference on foreign
currency denominated long term borrowings relating to the acquisition
of depreciable capital assets are adjusted in the carrying cost of such
assets for current year.
6. Revenue Recognition
i) Revenue from product sales is stated exclusive of returns,
inter-division transfers, sales tax but includes excise duty.
ii) Dividend income is recognized as and when the right to receive is
iii) Export benefits and other benefits are accounted for on accrual
basis. Export entitlements are recognized as reduction from material
consumption when the right to receive credit is established in respect
of the exports made and when there is no significant uncertainty
regarding the ultimate collection of the relevant export proceeds.
7. Employee Benefits
i) Short Term Employee Benefits:
Employee benefits payable fully within twelve months of rendering the
service are classified as short term employee benefits and are
recognized in the period in which the employee renders the related
Contributions to the Provident Fund, which is a defined contribution
scheme, is recognized as an expense in the profit and loss account in
the period in which the contribution is due.
ii) Long Term Employee Benefits:
Post Employment Benefits (Defined Benefit Plans)
The employees gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
at Balance Sheet date based on an actuarial valuation carried out by an
independent actuary using the projected unit credit method. Actuarial
gains and losses and past service cost are recognized immediately in
the profit and loss account.
Long term employee benefit also comprises of compensated absences.
These are measured based on an actuarial valuations carried out by an
independent actuary using the projected unit method at balance sheet
date unless they are insignificant. Actuarial gains and losses and
past service cost are recognized immediately in the profit and loss
8. Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized. Other borrowing
costs are recognized as an expense in the period in which they are
Leases, where the lessor retains substantially all the risks and
benefits of the ownership of the leased item are classified as
operating leases. Lease rentals for assets taken on operating lease are
charged to the profit and loss account in accordance with Accounting
Standard 19 on leases.
10. Government Grants and Subsidies
Grants and Subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all
underlying conditions will be complied with. When the grant or subsidy
relates to an asset, its value is deducted in arriving at the carrying
amount of the related asset.
11. Earnings Per Share
Basic earning per share is 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.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of equity shares outstanding during the
year are adjusted for the effects of all dilutive potential equity
12. Other Non Current Assets
Preliminary expenses are written off over a period of 10 years.
13. Impairment of Assets
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the carrying value of future cash flows
expected to arise from the continuing use of the assets and its
eventual disposal. The impairment loss to be expensed is determined as
the excess of the carrying amount over the higher of the asset''s net
sales price or present value as determined above.
14. Deferred Tax
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted by the balance sheet date. Deferred tax assets are recognized
only to the extent there is reasonable certainty that the assets can be
realized in future. Deferred tax assets and liabilities are reviewed at
each balance sheet date and are restated to reflect the amount that is
reasonably certain to be released/ payable.