Page 69 - GlaxoSmithKline Pharmaceuticals AR 2012

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Biddle Sawyer Limited
1 SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Accounting
The financial statements are prepared under the historical cost convention
and comply in all material aspects with the applicable accounting principles
in India, accounting standards notified under sub-section (3C) of Section 211
of the Companies Act, 1956 and the relevant provisions of the Companies
Act, 1956.
(b) Fixed Assets and Depreciation
Fixed assets are stated at cost of acquisition, including any attributable
cost for bringing the asset to its working condition for its intended use, less
accumulated depreciation. Interest on borrowings attributable to new projects
is capitalised and included in the cost of fixed assets as appropriate.
The Company provides for depreciation on a straight line method. The
depreciation rates used by the Company are equal to or higher than the
principal rates specified in Schedule XIV to the Companies Act,1956 and
where higher are as follows:
S. L. M. Rates %
Buildings .. .. .. .. .. .. .. .. 3.50
Plant and Machinery (excluding Gas Installations) .. .. .. 10.00
Furniture and Fittings .. .. .. .. .. .. .. 10.00
Vehicles and Mainframe Computers .. .. .. .. .. 25.00
Personal Computers and Laptops .. .. .. .. .. 33.33
No write-offs are made in respect of leasehold land.
Assets identified and evaluated technically as obsolete and held for disposal
are stated at lower of book value and estimated net realisable value/salvage
value.
(c) Investments
Long term investments are stated at cost, except where there is a diminution
in value other than temporary in which case the carrying value is reduced
to recognise the decline. Current Investments are stated at cost or fair value
whichever is less.
(d) Inventories
Raw materials, Packaging materials and Stores, Spares and Loose tools are
valued at cost, on First-in First-out basis. Work-in-process is valued at cost of
manufacturing which includes an appropriate portion of overheads upto the
stage of completion. Finished goods is valued at lower of cost and estimated
net realisable value.
(e) Revenue Recognition
Sales are recognised upon delivery of products and are recorded inclusive of
excise duty but are net of trade discounts.
(f) Foreign Currency transactions
Foreign currency transactions are accounted at the exchange rates prevailing
at the date of the transaction. Gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies, are recognised in the Profit and Loss
Account. Premium in respect of forward contracts is accounted over the
period of the contract.
(g) Research and Development
Capital expenditure on Research and Development is treated in the same way
as expenditure on Fixed Assets. The revenue expenditure on Research and
Development is written off in the year in which it is incurred.
(h) Provision for Retirement Benefits
The Company has its own Gratuity Fund recognised by the Income
Tax authorities and the fund is administered through Trustees. The
Superannuation fund benefits is administered by a trust formed for this
purpose through the Group Schemes of the Life Insurance Corporation of
India, and the liability towards Superannuation is provided according to the
rules of the Fund.
(i) Excise Duty
The excise duty in respect of closing inventory of finished goods is included
as part of inventory. The amount of CENVAT credits in respect of materials
consumed for sales is deducted from cost of materials consumed.
(j) Taxes on Income
Current tax is determined as the amount of tax payable in respect of taxable
income for the period.
Deferred tax is recognised, subject to the consideration of prudence, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one or
more subsequent periods.
(k) Other Accounting Policies
These are consistent with the generally accepted accounting principles.
2 SHARE CAPITAL
As at 31st
December, 2012
As at 31st
December, 2011
Rs. ’000 Rs. ’000
Authorised
1,500,000 (Previous year: 1,500,000) Equity
Shares of Rs. 10 each .. .. .. 1,50,00 1,50,00
Issued, Subscribed & Paid-Up
960,000 (Previous year: 960,000) Equity
Shares of Rs. 10 each fully paid up.. .. 96,00 96,00
(of the above 750,000 ordinary shares have
been allotted as fully paid-up Bonus shares
by capitalisation of General Reserve)
Total 96,00 96,00
(a) Shares held by holding company
Equity Shares of Rs. 10 each 960,000
(Previous year: 960,000) held by
GlaxoSmithKline Pharmaceuticals
Limited, the Holding Company.. .. 96,00 96,00
(b) Reconciliation of the number of shares
Number
of Shares
Rs. ‘000 Number
of Shares
Rs. ‘000
Balance at the beginning of the year 960,000 96,00 960,000 96,00
Issued during the year .. .. .. – – – –
Balance at the end of the year .. .. 960,000 96,00 960,000 96,00
(c) Rights, preferences and restrictions
attached to equity shares:
The Company has only one class of
equity shares having a par value of
Rs 10/- per share. Each share holder
of equity shares is entitled to one vote
per share. The company declares and
pays dividends in Indian rupees. The
dividend proposed by the Board of
Directors is subject to the approval of
the shareholders in the ensuing Annual
General Meeting except in case of
interim dividend.
In the event of liquidation of the
company, the holders of equity
shares will be entitled to receive
remaining assets of the company, after
distribution of all preferential amounts.
The distribution will be in proportion to
the number of equity shares held by
the shareholders.
(d) Details of shareholders holding more
than 5% shares in the Company:
Number
of Shares
Number
of Shares
GlaxoSmithKline Pharmaceuticals
Limited, the Holding Company
960000
(100%)
960000
(100%)
3 RESERVES AND SURPLUS
As at 31st
December,
2012
As at 31st
December,
2011
Rs. ’000 Rs. ’000
Capital Reserve
Balance as at the beginning of the year .. .. 2,91 2,91
Additions/Deductions.. .. .. .. .. – –
Balance as at the end of the year .. .. .. 2,91 2,91
General Reserve
Balance as at the beginning of the year .. .. 8,91,95 7,32,12
Transfer from Profit and Loss Account .. .. 66,22 1,59,83
Balance as at the end of the year .. .. .. 958,17 891,95
Profit & Loss Account
Balance as at the beginning of the year .. .. 53,46,78 60,07,24
Profit for the year .. .. .. .. .. 6,62,15 15,98,33
Less : Appropriations
Interim Dividend .. .. .. .. .. (22,00,00) (18,00,00)
Tax on dividend .. .. .. .. .. (3,56,90) (2,98,96)
Transfer to General Reserve .. .. .. (66,22) (1,59,83)
Balance as at the end of the year .. .. .. 33,85,81 53,46,78
Total 43,46,89 62,41,64