Note 1: Significant Accounting policies to the Standalone Financial Statements Annexure 1.1: Corporate Information:
The Company was originally formed at Partnership Firm in the name and style of M/s. Mono Chemist. The firm was converted from Partnership firm into Limited Company with the name of Mono Pharmacare Limited with effect from 17th October, 2022 vide CIN U24304GJ2022PLC136193. The Company is engaged in the business of distribution of Pharmaceutical items.
Place of business:
The place of business of the Company is at1A, Krinkal Apartment Opp. Mahalaxmi Temple, Paldi Ahmedabad Gujarat 380007.
Annexure 1.2: Significant Accounting Policies:
The significant accounting policies followed by the company are stated as below:
i. Basis of preparation of financial statements
a. The financial statements are prepared under the historical cost convention, in accordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provision of the Companies Act, 2013.
b. The accounts have been prepared on a going concern basis under historical cost convention.
c. Accounting policies not specifically referred to otherwise are in consonance with generally accepted accounting principles followed by the Company.
ii. Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates and differences between actual results and estimates are recognised in the periods in which the results are known / materialise.
iii. Property, Plant and Equipment
a. Fixed assets are carried at cost of acquisition less accumulated depreciation.
b. The cost of fixed assets comprises the purchase price (net of rebates and discounts) and any other directly attributable costs of bringing the assets to their working condition for their intended use.
iv. Depreciation:
a. Depreciation on fixed assets is being provided on Written down value method as per the useful life prescribed in Schedule II of the Companies Act, 2013.
b. Depreciation in respect of addition to fixed assets is provided on pro-rata basis from month to month in which such assets acquired/installed.
c. Depreciation on fixed assets sold, discarded or demolished during the year is being provided at their respective rate upto the month in which such assets are sold, discarded or demolished.
v. Investments
Investments are Long-term, unless stated otherwise and are stated at cost except where there is diminution in value other than temporary, in which case a provision is made to the carrying value to recognize the diminution.
vi. Taxation:
a. Current tax:
Provision for current tax is made on the estimated taxable income at the rate applicable to the relevant assessment year.
b. Deferred tax:
Deferred tax charge or benefit reflects the tax effects of timing differences between accounting income and taxable income, which originate during the year but reverse in subsequent years.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date.
vii. Revenue Recognition:
- Sales of pharmacy products are exclusive of GST and are stated net of discounts. Sale of pharmacy products is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is generally on dispatch of goods. Returns against sales and price difference are recognized as and when ascertained and are netted from the amount of sales for the year.
viii. Borrowing Cost:
Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.
Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
ix. Current & Non Current Classification:
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set-out in the Act. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.
x. Inventories:
Inventories are valued at the lower of cost (Generally determined on FIFO basis) and Net realizable value. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
xi. Provisions and Contingencies:
a. A provision is recognised when there is a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management best estimates of the expenditure required to settle the obligation as at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate of each such obligation.
b. A contingent liability is disclosed when there is a possible or present obligation that may, but probably will not require an outflow of resources, unless the possibility of such outflow is remote.
c. Contingent Assets are neither recognised nor disclosed.
xii. Cash Flow Statement
The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company.
Cash and Cash equivalents presented in the Cash Flow Statement consist of cash on hand and unencumbered bank balances and Fixed Deposit with the banks which are short term.
xiii. Earnings per Share:
Basic earning per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, if any.
xiv. Segment Reporting :
The company is in the business of pharmaceutical items. Therefore disclosure under AS - 17 Primary segment reporting not applicable. However Secondary Segment reporting on the basis of the geographical location of the customer' is as below.(Refer note no :-33)
The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment.
xv. Leases :
Company as a lessee
Assets acquired on leases wherein a significant portion of the risk and reward of the ownership are retained by the lessor and classified as operating leases. Lease rentals paid for such are recognised as an expense on systematic basis over the term of lease.
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