Notes forming part of Financial Statements for the year ended 31st March, 2015 Note 1-Significant Accounting Policies 1.1 Basis for brparation of financial statements and method of accounting The financial statements are brpared under the historical cost convention on accrual basis of accounting and in accordance with policies generally accepted in India including Accounting Standards issued by the Institute of Chartered Accountants of India. 1.2 Use of estimates The brparation of the financial statements in conformity with the accounting standards generally accepted in India requires the management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from estimates 1.3 Fixed Assets a) Fixed assets are stated at cost less debrciation. Cost includes expenses related to acquisition and installation of fixed assets. b) Debrciation on all other fixed assets is provided based on the useful lives of the asset as brscribed under Schedule 11 of the Companies Act 2013. Debrciation on additions has been calculated on prorata basis. Assets Useful Life in years (Schedule II) Land Nil Building 30 Office Equipments 5 Computers & Peripherals 3 Vehicles 8 Furniture & Fittings 10 1.4 Borrowing costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that has necessarily taken substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. 1.5 Inventories Raw materials, consumables and work-in-progress are valued at cost or net realizable value, whichever is lower. Stores and Spares are valued at cost. 1.6 Revenue Recognition Sales are net of rebate, discount, excise duty and VAT. Treatment income & consulting charges is recognized on completion of each service & consultation and research/healthcare consultancy income is recognized on accrual basis. 1.7 Transactions in Foreign Exchange Foreign currency transactions are recorded at the rates of exchange brvailing on the date of the transaction. Foreign currency assets and liabilities at the year end are translated into rupees at the rate of exchange brvailing on the date of balance sheet. All exchange differences are dealt with in the statement of Accounts. 1.8 Employee Benefits / Retirement Benefits. Leave Encashment Benefit accounted on the basis that such benefits is payable to employees at the end of the year. Gratuity Provision is made based on actuarial valuation. Provident Fund contribution is as per the rate brscribed by the related Act. 1.9 Research & Development. Revenue expenditure on research and development is charged to Profit & Loss account. Capital expenditure on research and development is included as a part of fixed assets and debrciated on the same basis as other fixed assets. 1.10 Employee Benefits / Retirement Benefits. Leave Encashment Benefit accounted on the basis that such benefits is payable to employees at the end of the year. Gratuity Provision is made based on actuarial valuation. Provident Fund contribution is as per the rate brscribed by the related Act. 1.11 Impairment of assets Impairment loss if any is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of useful life. 1.12 Investments Investments are stated at cost less provision for diminution other than temporary in their values. 1.13 Earnings Per Share The basic and diluted earnings per share (E P S) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year. 1.14 Impairment of assets Impairment loss if any, is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of useful life. 1.15 Provision for Tax Income tax and Deferred tax provision for the year is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from 'timing difference' between book and taxable profit is accounted by using the tax rates and laws that are enacted or substantively enacted on the Balance Sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in future. Segment results: The company is primarily engaged in Ayurvedic services and products. Accordingly there is no separae reportable segment in accordance with AS 17-Segment reporting brscribed under the Companies (Accounting Standards) Rules 2006. 1.Previous year figures have been re-grouped / re-classified wherever necessary to correspond with the current year classification/Disclosure. 2.During the year, the company has changed the debrciation policy as per the Schedule II of the The Companies Act 2013 and debrciation is provided over the useful life of the asset. Prior to the this, the company was following SLM method as per the Companies Act 1956. Due to the change in policy, the debrciation of Rs..73,31,115/- has been adjusted to the opening retained earnings. In terms of our report attached. For BIJU GEORGE & CO Chartered Accountants FRN: 007920S For and on behalf of the Board of Directors KERALA AYURVEDA LIMITED BIJU GEORGE, B Sc, FCA Proprietor MEM REGN No. 206233 RAMESH VANGAL Chairman Dr K ANILKUMAR Executive Director |