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Parenteral Drugs (India)
BSE: 524689|NSE: PDPL|ISIN: INE904D01019|SECTOR: Pharmaceuticals
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« Mar 12
Accounting Policy Year : Mar '13
(a) I Basis of Prepartation 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,
 1956. 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
 upto commencement of commercial production are treated as part of
 project cost and are capitalized.
 
 (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
 
 Depreciation on fixed assets has been calculated on straight line
 method at the rates prescribed in schedule XIV of the Companies Act
 1956. No Depreciation has been provided on Capital Work in Progress.
 Capital subsidy received has been reduced from the cost of fixed assets
 for purpose of calculating depreciation.
 
 (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 year end 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 realisable 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 impairement loss recognised 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 recognised 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 crystallise, 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 realised.
 
 (l) Employee Benefits
 
 Short term employee benefits are recognised 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 actural
 valuation is provide and premium paid is charged to Profit and Loss
 Account.
 
 Provision for leave encashment is recognised 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 upto 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 an 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.
Source : Dion Global Solutions Limited
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