SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
a) The financial Statements have been prepared under the historical cost convention of the basis of "Accrual Concept" and in accordance with generally accepted accounting and principles and the accounting standards referred under the companies Act 2013 as adopted consistently by the company.
b) The Company generally follows mercantile system of accounting recognizes significant items of income and expenditure on accrual basis. The claims rate difference, Discounts interest on Debtors and creditors, gratuity & leave enchantment is unascertainable and accounted for as and when settled.
2. FIXED ASSETS AND DEPRECIATION:
a) Fixed assets are stated at cost at acquisition including freight, excise local taxes and incidental expenses less accumulated depreciation.
b) Depreciation on Fixed Assets i.e. provided on straight-line method at the rate and in manner prescribed in schedule XIV to companies Act, 2013.
c) Depreciation on addition to assets or on sale/discernment assets, is calculated pro-rate from the month of such addition or up to the of such sale/discernment, as the case may be;
d) Expenditure incidental to the expansion are accounted for in accordance with the conduce note on "Treatment of expenditure during construction period" issued by the institute of the Chartered Accountants or of India. The said expenditure is allocated to fixed assets in the year of commencement of the commercial production.
3. INVENTORY:
Inventories valuation has been done on following basis.
A. Raw Material At Cost
B. Work in Progress At Estimated Cost
C. Finish Goods At Cost or net realizable value whichever is lower.
D. Store & Spares At Cost
E. Packing Material At Cost
4. INVESTMENT:
Investments are stated at cost if any.
5. TAXATION:
Provision for current tax has been made on the basis income for the current accounting year as per the provision of Income tax Act, 1961.
The deferred tax for timing difference between the book and tax profits for the year is account for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax liabilities arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.
6. REVENUE RECOGNITION:
Income and expenditure are accounted for on accrual basis except certain items like interest, rebate, discounts and claims on sales and insurance claims etc. where there is no reasonable certainty regarding the amount and or its collectability/ recognition.
7. MISC. EXPENDITURE:
Preliminary expenses have been written of in 5 years.
8. EMPLOYEE RETIREMENT BENEFITS:
a) The liabilities in respect of gratuity has been not accounted as no one of the employees has completed qualified period of services to be entitled for gratuity as per policy of the company. The gratuity has been provided as and when paid.
b) Contribution to provided fund and superannuating scheme accruing during each year as per the schemes are charges to profit and loss account
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