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Parenteral Drugs (India)

BSE: 524689|NSE: PDPL|ISIN: INE904D01019|SECTOR: Pharmaceuticals
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Mar 15
Accounting Policy Year : Mar '16

Note : 1 Significant Accounting Policies

(a) Basis of Preparation of Financial Statement

The Financial Statements are prepared at historical costs convention on the basis of going concern in accordance with the generally accepted accounting principles in India and the provision of the Companies Act, 2013. Figures for the previous year have been re-grouped and rearranged wherever considered necessary . Figures in bracket represent corresponding previous year unless otherwise stated. Separate sets of books of accounts are maintained for separate units of production, as required by law.

(b) Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

(c) Fixed Assets

Fixed Assets are stated at historical cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any and the assets prior to 1993-94 are at value adjusted by revaluation, which includes expenditure incurred on the acquisition, fabrication and/or installation. Pre-operative expenditure comprising revenue expenses incurred in connection with project implementation during the period up to commencement of commercial production are treated as part of project cost and are capitalized. The Company has revalued upwards its land situated at Indore during the current year and created Revaluation reserve of Rs. 262,17,92,365/-.

(d) Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the intangible assets are capitalized.

(e) Depreciation

Effective from 01-04-2014, depreciation on fixed assets is provided based on the useful life of the assets as prescribed in schedule II to the Companies Act, 2013 and charged on pro- rata basis and depreciation has not been charged on the assets which are not used during the year.

(f) Foreign Exchange Transactions

Transactions in Foreign Currency are recorded in financial statements based on the exchange rate existing at the time of the transactions. Monetary items denominated in foreign currencies at the yearend are restated at year end rates.

(g) Investments

Long term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

(h) Inventories

Inventories are measured at lower of cost or net realizable value. Cost of Finished goods include cost of purchase, cost of conversion and other cost including manufacturing overhead in bringing them to their respective present location and condition. Cost of raw material, packing material and spares are determined on first in first out basis.

(i) Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. As impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(j) Recognition of Revenue and Expenditure

All revenue and expenditure are recognized and accounted for on accrual basis. Processing Charges also includes labour charges.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(k) Taxation

Provision for taxation of income tax is made on the basis of the taxable profit computed for current accounting year in accordance with the Income Tax Act 1961.

Deferred Tax resulting from timing differences between Book Profits and Tax Profits is accounted for at the current rates of tax to the extent the timing difference are expected to crystallize, in case of Deferred Tax Liabilities with reasonable certainty and in case of Deferred Tax Assets with virtual certainty that there would be adequate future taxable income against which such Deferred Tax Assets can be realized.

(l) Employee Benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

Retirement benefits in the form of provident fund, which is defined contribution plan, is charged to the statement of profit and loss of the year when the contribution to respective fund is due.

In case of provision of gratuity the Company has entered into an agreement with the SBI Life Insurance company to administer its gratuity scheme, current year amount payable on the basis of actuarial valuation is provided and premium paid is charged to Profit and Loss Statement.

Provision for leave encashment is recognized as expense in the Profit and Loss Account for the year in which employee has rendered services.

(m) Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

(n) Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statement.

(o) Leases

i) Operating Lease Payments are recognized as expenses in the Statement of Profit & Loss on a straight line basis over the lease term.

ii) Assets under Financial Leases are capitalized at the inception of the lease term at the lower of fair value of the leased property and present value of minimum lease payments.

iii) Assets given under operating Leases are included under Fixed Assets, Lease income on these assets is recognized in the statement of Profit & Loss on a straight line basis over the lease term.

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