1. A. Background
COLINZ LABORATORIES LIMITED (“the
Company”) is a public Company
domiciled in India and incorporated
under the provisions of Companies Act,
1956. The Company is incorporated with
an object to carry on the business of
manufacturing and trading in
Pharmaceutical formulations.
The Company's shares are listed on
Bombay Stock Exchange (BSE) in India.
B. Basis of preparation
1.1. Statement of compliance with Ind- AS
The financial statements of the Company
have been prepared in accordance with
Indian Accounting Standards (Ind-AS)
notified under Companies (Indian
Accounting Standards) Rules, 2015, as
amended from time to time
1.2. Going concern
These financials are prepared on going
concern basis on following basis:
i) Company has earned profits
during the year and in the
preceding previous years;
ii) The future business seems
prosperous for the pharma
industry.
1.3. Functional and presentation of
currency
The financial statements are prepared in
Indian Rupees which is also the
Company's functional currency. All
amounts are rounded to the nearest
rupees.
1.4. Fair value measurement
Fair value is the price that would be
received to sell an asset or paid to
transfer a liability in an orderly
transaction
between market participants at the
measurement date.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are
available to measure fair value,
maximizing the use of relevant
observable inputs and minimizing the
use of unobservable inputs.
Fair values, as applicable, have been
determined for measurement and / or
disclosure purpose using methods as
prescribed in “Ind-AS 113 Fair Value
Measurement”.
1.5. Use of significant accounting
estimates, judgement and
assumptions
The preparation of these financial
statements in conformity with the
recognition and measurement principles
of Ind-AS requires management to make
estimates and assumptions that affect the
reported balances of assets and
liabilities, disclosure of contingent
liabilities as on the date of financial
statements and reported amounts of
income and expenses for the periods
presented. The Company based its
assumptions and estimates on
parameters available when the financial
statements were prepared. Estimates
and underlying assumptions are
reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in
the period in which the estimates are
revised and future periods are affected.
Estimates and Assumptions
Key assumptions concerning the future
and other key sources of estimation
uncertainty at the reporting date that
have a significant risk of causing a
material adjustment to the carrying
amounts of assets and liabilities within
the next financial year are described as
below. The estimates used in the
preparation of the financial statements
are prudent and reasonable. Difference
between the actual results and estimates
are recognised in the period in which the
results are known/ materialized.
1.6. Presentation and disclosure of financial
statement
All assets and liabilities have been classified
as current and non-current as per
Company's normal operating cycle and other
criteria set out in Schedule III of the
Companies Act, 2013 for a company whose
financial statements are made in compliance
with the Companies (India Accounting
Standards) Rules, 2015.
Based on the nature of products / services
and time between acquisition of assets for
processing / rendering of services and their
realization in cash and cash equivalents,
operating cycle is less than 12 months,
however for the purpose of current/ non¬
current classification of assets and liabilities,
period of 12 months have been considered
as its normal operating cycle.
The Company presents assets and liabilities
in the balance sheet based on current / non¬
current classification.
An asset is treated as current when it is:
• Expected to be realized or intended to be
sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realized within twelve
months after the reporting period, or
• Cash or cash equivalents unless restricted
from being exchanged or used to settle a
• liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal
operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months
after the reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.
The Company classifies all other liabilities as
non-current.
1.7. Property, Plant and Equipment and
Depreciation
Recognition and measurement
Under the previous GAAP, property,
plant and equipment were carried at
historical cost less depreciation and
impairment losses, if any. On transition
to Ind-AS, the Company has availed the
optional exemption under Ind-AS 101
and accordingly it has used the carrying
value as at the date of transition i.e. 1st
April 2016 as the deemed cost of the
property, plant & equipment under Ind-
AS.
Properties plant and equipment are
stated at their cost of acquisition. Cost of
an item of property, plant and equipment
includes purchase price including non¬
refundable taxes and duties, borrowing
cost directly attributable to the
qualifying asset, any costs directly
attributable to bringing the asset to the
location and condition necessary for its
intended use and the present value of the
expected cost for the
dismantling/decommissioning of the
asset.
Subsequent costs are included in the
asset's carrying amount or recognised as
a separate asset, as appropriate, only
when it is probable that future economic
benefits associated with the item will
flow to the Company. All other repair and
maintenance costs are recognised in
statement of profit and loss as incurred.
There is no Capital work-in-progress as
on 31.03.2025.
Depreciation and useful lives
Depreciation on the property, plant and
equipment (other than freehold land and
capital work in progress) is provided on a
straight-line method (SLM) over their
useful lives which is in consonance of
useful life mentioned in Schedule II to the
Companies Act, 2013. Depreciation in
respect of fixed assets put to use during the
year is provided on a pro-rata basis with
reference to the date of installation of
assets.
De-recognition:
An item of property, plant and equipment and
any significant part initially recognised is de¬
recognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on de¬
recognition of the asset (calculated as the
difference between the net disposal proceeds
and the carrying amount of the asset) is
included in the statement of profit and loss
when the asset is de-recognised.
1.8. Inventories:
Raw Material, packing material, stock in trade,
work in progress and finished goods are
valued at lower of cost and net realizable value
as per Ind- AS - 2.
Costs of finished goods, and work in
progress are determined by taking material
cost (net of GST) and relevant appropriate
overheads, but excluding borrowing costs.
1.9. Revenue recognition:
Revenue is recognised to the extent that
it is probable that the economic benefits will
flow to the Company and the revenue can be
reliably measured. Revenue is measured at the
fair value of the consideration received or
receivable, taking into account contractually
defined terms of payment and excluding taxes
or duties collected on behalf of the
government and discounts given to the
customers. The Company has applied the
guidelines mentioned in Ind- AS 18 for
Revenue Recognition.
Interest income is recognized on a time
proportionate basis taking into account the
amount outstanding and the rate as
applicable.
Dividend is recognized on actual receipt basis.
1.10. Employee benefits - Retirement
benefits
Defined Contribution Plan:
Post- Employment benefit in the form of
Provident Fund for eligible employees, the
Company has defined Contribution Plan. This
is administered by the Regional Provident
Fund Commissioner. Provident Fund is
classified as Defined Contribution Plan, as the
Company has no further obligation or liability
beyond making the contributions and
depositing the same with the authorities. The
Company's contribution is defined by the
Provident
Fund Act and the provisions enacted from
time to time, and this contribution is charged
to Profit & Loss Account.
Leave Encashment Policy:
The Company does not have the policy of
Leave Encashment and hence there is no
liability on this account.
T ermination Benefits:
Termination Benefit, if any, are recognized
as an expense as and when incurred.
Gratuity:
The Gratuity is paid by the company as per
the Gratuity Act. As required by IND- AS 19
“Employee Benefits”, the liability is
ascertained based on the Actuarial valuation
and the current liability has been provided
for in the Profit & Loss account and the long
term gratuity liability has been disclosed as
the Contingent Liability in the Notes to
Accounts.
1.11. Taxes on income:
Tax expense comprises current and
deferred tax. Provision for current tax is
made after taking into consideration
benefits admissible under the provisions of
the Income Tax Act, 1961.
The deferred tax resulting from timing
difference between taxable and accounting
income is accounted using the tax rates and
laws that are enacted or substantively
enacted as on the balance sheet date.
Deferred Tax asset is recognised and carried
forward only to the extent that there is
virtual certainty that the asset will be
realized in future.
recognised in other comprehensive income
and accumulated in the 'Reserve for equity
instruments through other comprehensive
income'. The cumulative gain or loss is not
reclassified to profit or loss on disposal of
the investments.
There are no equity investments which are
held for trading.
1.13. Cash and cash equivalent:
Cash and cash equivalents include cash in
hand, bank balances, deposits with banks
(other than on lien) and all short term and
highly liquid investments that are readily
convertible into known amounts of cash and
are subject to an insignificant risk of changes
in value.
For the purpose of cash flow statement, cash
and cash equivalent as calculated above also
includes outstanding bank overdrafts as they
are considered an integral part of the
Company's cash management.
1.14. Cash-flow statement:
Cash flows are reported using the
indirect method, where by net profit before
tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of
past or future operating cash receipts or
payments and item of income or expenses
associated with investing or financing cash
flows. The cash flows from operating,
investing and financing activities are
segregated.
1.12. Investments in equity instruments at
fair value through other comprehensive
income (FVTOCI).
The quoted and unquoted Equity
investments are initially measured at fair
value plus transaction costs. Subsequently,
they are measured at fair value with gains
and losses arising from changes in fair value
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