SENSEX NIFTY India | Accounting Policy > Pharmaceuticals > Accounting Policy followed by Plethico Pharmaceuticals - BSE: 532739, NSE: PLETHICO

Plethico Pharmaceuticals

BSE: 532739|NSE: PLETHICO|ISIN: INE491H01018|SECTOR: Pharmaceuticals
, :
VOLUME 10,351
Plethico Pharmaceuticals is not traded in the last 30 days
Dec 12
Accounting Policy Year : Mar '14
A Basis for Preparation of Financial Statement
 The financial statements have been prepared and presented under the
 historical cost convention on accrual basis in accordance with the
 Accounting Standards referred to in Section 211 (3C) of the Companies
 Act, 1956, which have been prescribed by the Companies (Accounting
 Standards) Rules, 2006, and the relevant provisions of the Companies
 Act, 1956.
 B Use of Estimates
 The preparation of financial statements is in conformity with generally
 accepted accounting principles if requires management to make
 assumptions and estimates, which it believes are reasonable under the
 circumstances that affect the reported amounts of assets, liabilities
 and contingent liabilities on the date of financial statements and the
 reported amounts of revenue and expenses during the period. Actual
 results could differ from those estimates. Examples of such estimates
 include useful lives of Fixed Assets, provision for doubtful debts /
 advances, deferred tax, export incentives, provision for retirement
 benefits, etc.
 C Revenue Recognition
 Revenue is recognized to the extent that it can be reliably
 measured and is probable that the economic benefits will flow to
 the company.
 The Company recognizes sales at the point of dispatch of goods to
 the customers.
 All other income are recognized as revenue, when earned or when
 the right to receive is established.
 D Purchase
 Purchases are accounted net of cash discounts, wherever applicable.
 E Fixed Assets
 (i) Fixed Assets are stated at cost of acquisition or construction less
 accumulated depreciation. The cost of fixed assets includes non
 refundable taxes and levies, freight and other incidental expenses
 related to the acquisition and installation of the respective assets
 and reducing there from refundable levies received / receivable, if
 any. Borrowing cost attributable to acquisition or construction of
 fixed assets are capitalized to respective assets.
 (ii) The computer software cost are capitalized and recognized as
 intangible assets in terms of the Accounting Standards 26 on Intangible
 Assets based on materiality, accounting prudence and significant
 economic benefit there from expected to flow for a period longer than
 one year. Capitalized costs include direct costs of implementation and
 expenses directly attributable to the development of software.
 F Depreciation
 (i) Depreciation on fixed assets (except lease hold land and
 information technology assets) is provided on straight-line method at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956.
 (ii) Computer Software cost capitalized is amortized over estimated
 useful life of 3 to 5 years as estimated at the time of capitalization.
 G Impairment of Assets
 If indications suggest that assets of the Company may be impaired, the
 recoverable amount of assets are determined on the Balance Sheet date
 and if it is less than its carrying amount, the carrying amount of
 assets are reduced to the said recoverable amount.
 H Inventories
 (i) Stock of Raw Materials and Finished Goods are valued at lower of
 cost or realizable value. The cost of Raw Materials is determined on
 FIFO basis. The cost of Finished Goods produced is determined on
 weighted average basis whereas cost of Finished Goods traded is
 determined on FIFO basis and including manufacturing overheads where
 (ii) The stocks of Packing Materials, Consumables Stores, Promotional
 Materials & Stock-in-Process are valued at cost.  The cost of Packing
 Materials, Consumable Stores & Promotional Material is determined on
 FIFO basis. The cost of Work In Progress produced is determined on
 weighted average basis.
 I Retirement Benefits
 (a) Short Terms Benefits:
 Short term employee benefits are recognized as an expense at the
 undiscounted amount in profit and loss account of the period in which
 the related service is rendered. Short term employee benefits are
 recognized as expense in the profit and loss account of the period in
 which service is rendered.
 (b) Long Term Benefits :
 (i) Defined Contribution Plan :
 1.  Provident and Family Pension Fund :
 The eligible employees of the Company are entitled to receive post
 employment benefits in respect of provident and family pension fund, in
 which both employees and the Company make monthly contributions at a
 specified percentage of the employees eligible salary (currently 12% of
 employees eligible salary). The contributions are made to Employees''
 Provident Fund Organization (EPFO) and the Central Provident Fund under
 the State Pension Scheme. Provident Fund and Family Pension Fund are
 classified as Defined Contributions Plans as the Company has no further
 obligation beyond making the contribution. The Company''s contribution
 Plan are charged to profit and loss account as incurred.
 2.  Contribution to defined contribution schemes such as Provident
 Fund, Family Pension Fund and ESI Fund are charged to the profit and
 loss account.
 (ii) Defined Benefit Plan : 1.  Gratuity :
 The Company has an obligation towards gratuity, a defined benefits
 retirement plan covering eligible employees. The plan provides a lump
 sum payment to vestedemployees at retirement, death while in employment
 or on termination of employment of an amount equivalent to 15 days
 salary payable for each completed year of service. Vesting occurs upon
 completion of five years of service. The Company has employees''
 gratuity fund managed by the Life Insurance Corporation of India (LIC)
 based on an independent actuarial valuation made at the period end
 Actuarial gains and losses are recognized in the profit and loss
 2.  Compensated absences :
 The Company provides for encashment of leave or leave with pay subject
 to certain rules. The employees are entitled to accumulate leave
 subject to certain limits for future encashment/availment. The
 liability is recognized based on number of days of unutilized leave at
 each balance sheet date on the basis of an independent actuarial
 valuation. Actuarial gains and losses are recognized in the profit and
 loss account.
 (iii)The defined benefit obligations in respect of gratuity are
 recognized on the basis of valuation done by an independent actuary
 applying project unit credit method. The actuarial gain / loss arising
 during the period and recognized in the profit and loss account of the
 period. The company has an employees'' gratuity fund managed by the Life
 Insurance Corporation of India (LIC).
 (iv)Leave encashment is charged to revenue on accrual basis.
 J Investments
 (i) Long Term Investments are stated at cost and provision is made
 to recognize any diminution in value other than that of a
 temporary nature.  
 (ii) Current investments are carried at lower of cost and market value.
 Diminution in value is charged as a loss in profit and loss account.
 K Foreign Exchange Transactions
 (i) The Transactions in Foreign Currency have been accounted at the
 exchange rate prevailing on the date of the transaction.  period-end
 Receivables / Payables have been translated at the period-end rate of
 exchange. The difference on account of fluctuation in the rate of
 exchange as prevailing on Sales / Purchase transaction date and on
 Realization / Payment / period-end date are recognized in Profit & Loss
 (ii) Investment in shares in Foreign Subsidiaries and other companies
 abroad are expressed in reporting currencies at the rate of exchange
 prevailing at the time when the original investments were made.
 (iii)Foreign Exchange Gain or Foreign Exchange losses arising out of
 revaluation in respect of outstanding FCCB at the Balance Sheet date
 shall be recognized in the books of accounts and amount of such gains /
 losses is recognised in Profit & Loss account.
 (iv)The premium payable on redemption of FCCB shall be provided in the
 books of accounts as per the terms of the Offering Circular. The
 Premium on Redemption of FCCB will first be adjusted from Share Premium
 available and after full utilization of Share Premium, the balance
 would be adjusted from Free Reserves or charged to Profit & Loss
 Account and premium so payable shall be disclosed separately
 L Research and Development
 Research and Development costs (other than cost of fixed assets
 acquired) are charged as an expense in the period in which they are
 M Income/Expenditure during Construction Period
 Revenue Expenditure during construction are capitalized to respective
 assets. Similarly revenue incomes during construction are reduced from
 respective assets.
 N Provisions, Contingent Liabilities and Contingent Assets
 (a) A provision is recognized, if as a result of past event, the
 Company has a present legal obligation that can be measured reliably,
 and it is probable that an outflow of economic benefits will be
 required to settle the obligation.  Provisions are determined by the
 best estimate of the outflow of economic benefits required to settle
 the obligation at the reporting date.  Where no reliable estimate can
 be made, a disclosure is made as contingent liability.
 (b) A disclosure for a Contingent Liability is made when there is
 possible obligation or a present obligation that may, but probably will
 not, required outflow of resources. Where there is a possible
 obligation or present obligation where likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 (c) Contingent Assets are neither recognized nor disclosed.
 O Miscellaneous Expenditure (to the extent not written off)
 Security Issue Expenses and other Deferred Revenue Expenses shall be
 amortized on the basis of 1/5th of the total expenses and the extent to
 which they are not written off shall be disclosed in the Balance Sheet.
 P Provision for Current & Deferred Tax
 Provision for Tax for the period comprises Current Income Tax and
 Deferred Tax.
 Provision for Current Tax is determined after taking in to
 consideration the provision of the Income tax Act''1961 relevant for the
 fiscal year as applicable or substantively enacted as on the balance
 sheet date.
 a) In accordance with Accounting Standard 22  Accounting for taxes on
 Income issued by the Institute of Chartered Accountants of India, the
 deferred tax for timing differences is accounted for, using the tax
 rates and laws that have been enacted or substantively enacted on the
 Balance Sheet date.
 b) Deferred Tax Assets arising from timing differences are recognized
 only on the consideration of prudence.
 Q Lease
 Assets taken on lease, under which all the risks and rewards of
 ownership are effectively retained by the lessor, are classified as
 operating lease.  Operating lease payments are recognized as
 expense in the Profit and Loss Account.
 The previous year figures have been regrouped/reclassified,
 wherever necessary to conform to the current period''s
Source : Dion Global Solutions Limited
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