1. SIGNIFICANT ACCOUNTING POLICIES

1. Basis for brparation of Financial Statements

a) Basis for brsentation of Financial Statements

The financial statements have been brpared and brsented under the historical cost convention on an accrual basis of accounting and comply with the Accounting Standards as specified under Sec. 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, other pronouncements of the Institute of Chartered Accountants of India 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 brsentation 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 debrciable assets and provisions for impairments.

2. Fixed assets

a) Fixed assets are stated at cost less debrciation. Capital work in progress includes br-operative expenses.

b) Expenditure incurred on projects / expansion during implementation is capitalized and apportioned to various assets on commissioning / completion of the same.

3. Debrciation

a) Debrciation on fixed assets is provided on straight-line method at the rates not lower than the rates brscribed by the schedule II of the Companies Act, 2013 and in the manner as brscribed 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 brmises as on the balance sheet date.

9. Researches and Development

a) Capi tal expendi tu re 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 brsent 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 brsent 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 brference 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 accounted for 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. 

NOTES ON FINANCIAL STATEMENTS

28. PRIOR PERIOD ITEMS

Expenses include Rs. 11 lacs (Previous Year Rs. 195 lacs) as expenses (net) relating to earlier years.  

30. SEGMENT REPORTING

In accordance with AS-17 “Segment Reporting”, segment information has been given in consolidated financial statements of the company, and therefore, no seperate disclosure on segment information is given in these financial statements.

34. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2015. Hence, no provision is required in the accounts for the year under review.

35. DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard “Accounting for taxes on income” i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

36. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all assets and non-current investments stated otherwise have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for debrciation and for all known liabilities is adequate and considered reasonable.

b) With a view to increase its visibility in the promising FMHG/OTC business and reap the potential benefits in the above business streams, with added advantages of better brand building, customer confidence and better product quality, the company has decided to acquire/buyout new brands, expand the existing brands and product portfolio, a sum of Rs. 3393 Lacs has been advanced to Dr. Morepen Limited, its wholly owned subsidiary for the same.

c) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

d) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

e) During the financial year ending 31st March 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon’ble High Court at Shimla. The central government brferred an appeal against the said order before Division of the High Court which was allowed. While setting aside the impugned order, matter was remanded back to the single judge for considering the rebrsentation of Central Government & deciding the petition afresh after hearing all the parties. The matter is pending for adjudication before single judge of Hon’ble Himachal Pradesh High Court.

f) Remuneration paid to directors' for the period April 2005 - March 2014 amounting to Rs. 356 lacs is subject to central government approval.

g) Previous year figures have been regrouped and rearranged wherever necessary to suit the brsent year layout.

h) Figures have been rounded off to the nearest lacs.