NOTE-1 : MATERIAL ACCOUNTING POLICIES
CORPORATE INFORMATION.
Banaras Beads Limited is an Export house recognized by Government of India, established in the year 1980. Banaras Beads Limited is India’s
Largest manufacturers of Glass Beads, Fashion Jewellery & Accessories. Banaras Beads Limited also deal in Beads made from Clay, Brass,
Aluminum, Copper, Resin, Ceramics, Horn, Bone, Semiprecious stones, Agate, Lac, Hand Painted Beads, Spray Painted Beads, Leather Cords,
Cotton Wax cords & Misc. Handicraft Products.
The Company produces Glass Beads of handmade (Lamp Work) as well Machine made (Pressed Beads and Tube cutting Machine). The latest
machines used for producing beads are from India, Japan, China, Isarel, Chez republic & Germany.
The Company serves customers in four Business models-
1. Supplying Products to wholesalers & Retailers
2. Supplying to companies dealing in Craft business who eventually sells to their own stores or to Craft stores / Retail stores
3. Supplying directly to Craft stores / Large retail chain stores
4. Online Business Companies
The company is committed for all social compliance as required under various Acts and as required by Foreign Buyers. For this purpose, social
audit is conducted by SEDEX SMETA and other agencies time to time. Company meets all standards required for such Social, Ethical &
Security Audit.
A. STATEMENT OF COMPLIANCE:
The company’s financial statement have been prepared in accordance with the provision of the Companies Act., 2013 and the Ind ian
Accounting Standard (“Ind AS”) notified under the Companies (Indian Accounting Standard) Rules, 2015 issued by Ministry of
Corporate Affairs in respect of section 133 of the Companies Act,2013. In addition, the guidance notes/announcements issued by the
Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations
require a different treatment.
B. BASIS OF ACCOUNTING:
The accounts have been prepared on the basis of historical cost convention and as a going concern. Accounting policies not
specifically referred to otherwise are in consistent with generally accepted accounting policies. The company generally follows the
mercantile system of accounting recognizing both income and expenditure on accrual basis. The material accounting
policy/information related to preparation of standalone financial statements have been discussed in the respective notes.
C. PRESENTATION OF FINANCIAL STATEMENT:
The Balance Sheet and the Statement of Profit and loss prepared and presented in the format prescribed in the Schedule III to the
Companies Act, 2013(“the Act”) as amended. The statement of cash flow has been prepared and presented as per the requirements of
Ind AS 7 “Statement of Cash Flow”. The disclosure requirement with respect to items in the Balance Sheet and the Statem ent of the
profit and Loss, as prescribed in the Schedule III to the Act as amended, are presented by way of notes forming part of the financial
statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing
Obligation and Disclosure Requirements) Regulations, 2015.
Amounts in the financial statements were presented in absolute Indian Rupee upto FY 2020-21. Due to change in Schedule III to the
Companies Act’2013 vide notification dated 24th March’2021 of Ministry of Corporate Affairs, Government of India, the financial
statements are presented in Rupees Lacs. Per share earning data are presented in Indian Rupees to two decimals places.
D. REVENUE RECOGNITION:
• The company generally follows the mercantile system of accounting recognizing both income and expenditure on accrual basis.
• Sales include export sales whether made directly or through third parties. Sale does not include Goods and Service Tax or any other
indirect tax such as Excise Duty, VAT etc. Due to applicability of Goods and Service Tax, Export Sales is recognized when goods
are dispatched from factory with export invoice and thus includes Goods under shipment.
• Interest income is accrued on a time basis and the effective interest rate.
• Dividend income is accounted in the period in which the same is received. Profit/Loss of LLP in which the company is partner is
accounted for in the year in which the accounts of LLP is received.
• Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic
benefits will flow to the company and the amount of income can be measured reliably.
• All the expenditures are recognized on accrual basis except written else otherwise in any notes. Electricity expenses are recorded on
the basis of actual amount payable to Electricity Board net of electricity supplied through generation made by Solar System.
• Duty Credit Script under Export promotion Capital Goods/ Advance Authorisation Incentive Script Schemes, Remission on Duties
& Taxes on Export Products (RODTEP) are normally consumed in payments of custom duty against imports made. Entries for such
consumption is made in respective purchase account on the amount of custom duty adjusted. Entries for scripts transferred are
accounted for on realised value. Duty Credit Script under Advance Authorization Incentive Script Schemes, Remission on Duties &
Taxes on Export Products (RODTEP) receivable at the end of accounting year is accounted on estimated realizable value.
E. PROPERTY, PLANT AND EQUIPMENT(PPE):
PPE is recognized when it is possible that the future economic benefits associated with the item will flow to the company and the cost
of the item can be measured reliably. PPE is stated at original cost net of tax/duties credits availed, if any, less accumulated
depreciation, if any.
For Transition to Ind AS, the company has elected to adopt as deemed cost, the carrying value of PPE measured as per I -GAAP less
accumulated depreciation on the transition date of April 1, 2016. Hence, regarded thereafter as the historical cost. When parts of
property plant and equipment have different useful lives, they are accounted for as separate items (major component of property, plant
and equipment.)
PPE not ready for intended use on the date of the Balance Sheet are disclosed as “Capital Work-in-Progress”.
Depreciation on PPE is provided to the extent of depreciable amount on written down value method based on useful life of the assets
as prescribed in Schedule II to the Companies Act, 2013 on single shift basis. Depreciation on additions to and deductions from,
owned asset is calculated on pro rata to the period of the use.
F. INVESTMENT PROPERTY:
The company does not intend to create Property to earn rental income. The company is having rental income by renting out very small
part of unused factory building which is not a material amount, thus no property is classified separately as Investment Property.
G. INTANGIBLE ASSET:
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed,
if any, less accumulated amortization. Intangible Assets are amortized on Written Down Value basis over the useful life of as set as
prescribed in Schedule II of the Companies Act’2013.
H. INVESTMENTS:
Long Term Investments are shown at cost and fluctuations in the market price of quoted shares are not provided for. Current
Investments are valued at lower of cost or realizable value as quoted in stock exchanges on the reporting date and any reduct ion in
realizable value is debited to the Statement of Profit & Loss. If realizable value of current investment increases in subsequent years the
increase in value of current investment to the level of the cost is credited to the Statement of Profit & Loss.
I. EMPLOYEE BENEFIT:
Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia scheme, performance-
linked reward falling due to wholly within twelve month of rendering services are recognized in the period in which the emplo yee
renders the related services.
Company's contribution to Provident Fund, Family Pension Fund, ESI etc. are charged to Profit & Loss Account on accrual basis.
Liability for gratuity in respect of employees is covered under the Group Gratuity Policy taken by the company from Life Insurance
Corporation of India. The premium payable under the Policy, are charged to Profit & Loss Account. The short fall in the Fund, as
indicated by the L.I.C. is provided for by the Company as gratuity liability.
J. INVENTORIES:
Inventories are valued on the following basis-
Raw Materials : At average cost
Finished / Semi-finished goods : At Average cost or market value whichever is lower
Stores, spare parts and Consumables : At Average cost and in appropriate cases charged to manufacturing
expenses in the year of purchase.
K. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are accounted for in accordance with Ind AS-21. Transactions in foreign currencies are recorded at
the exchange rates prevailing on the dates of the transactions. Monetary items denominated in foreign currency and outstanding at the
Balance Sheet date are translated at the exchange rate prevailing at the year end and the difference arising on account of variation in
exchange rate is recognized as income or expense in the year in which they arise. Non-monetary items denominated in foreign
currency are carried at the exchange rate in force at the date of the transaction.
L. ACCOUNTING AND REPORTING OF INFORMATION FOR OPERATING SEGMENTS:
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the company to make decisions for performance assessments and resource allocation. Segment accounting
policies are in line with the accounting policies of the company. The reporting of segment information is the same as provided to the
management for the purpose of the performance assessments and resource allocation to the segments.
M. INCOME TAXES:
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with
provisions of Section 115BAA of the Income Tax Act’1961.
Deferred Tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the companies financial
statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
N. BORROWING COST:
Borrowing cost that is attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of
such assets till such time the assets is ready for its intended use or sale. All other borrowing costs are recognized in profit or loss in the
period in which they are incurred.
|