Accounting policies are the rules and guidelines chosen by an enterprise for use in preparing & presenting its financial statements. Accounting policies are important because they set a framework that an enterprises follow consistently, and provide comparable and consistent standard financial statements over the years and relative to other enterprises.
A. SINGNIFICANT ACCOUNTING POLICIES:
1. Basic Assumptions
The Financial Statements are prepared on a going concern concept and as per the historical cost convention on accrual basis.
2. Revenue Recognition
(a) Sale is recognized on dispatch of goods to customers
(b) Sale of service/commission is recognized as and when the right to receive arises
(c) Export sales are accounted on the basis of dates of bill of lading and export incentives are accounted for in the year of export.
(d) Insurance & other claim to the extent considered recoverable are accounted for in the year of claim.
(e) Interest is recognized on a time of proportion basis taking into account the amount outstanding and the rate applicable.
(f) Other items of Income including subsidies are accounted as and when the right to receive arises
3. Fixed Assets And Depreciation
Fixed assets are stated at cost less depreciation. Depreciation on Fixed Assets Is provided for on written down value method as per rates prescribed in the Income Tax Act,
4. Investment
Investments are stated at cost.
5. Intangible Assets
There are no intangible assets.
6. Impairment of Assets
There is a policy of assessing whether there has been any impairment of assets at the year end and
necessary adjustment is made in the books of account for impairment of assets.
7. Provision and Contingencies
Provision and contingencies to the extent known and ascertainable have been provided in the book of
accounts. Contingent liabilities are not recognized but are disclosed by way of note in the financial statement Contingent assets are neither recognized nor disclosed in the financial statement.
8. Inventories
Inventories are valued at Cost or market price whichever is lower and the cost is worked out on FIFO basis.
9. Borrowing cost
Interest and other costs in connection with the borrowing of funds to the extent related/attributed to the acquisition of qualifying asset are capitalized up the date when such assets are ready for its intended use and all other borrowing costs are recognized as an expense in period for which they are incurred unless otherwise stated
10. Deferred Tax Liability
There is no such item which attracts temporary timing difference.
11. Other Accounting Standards
The accounts are maintained in conformity with the applicable Accounting Standards.
13. Prior years(S) Transactions
Charges or credits which arise in the current period as a result of error or omissions in the preparation of
financial statement of one or more prior periods are treated as prior period items, whereas the same is treated as current year’s charges or credits if it is determined/decided/approved in the current year.
14. Gratuity and Bonus:
Gratuity and bonus is accounted for on payment basis.
B. Notes on Accounts :
1.The Current Assets Loans & Advances have a value on realization in the ordinary course of business
equal to the amount at which those are stated in the Balance Sheet.
2.Balances of some of the debtors, Creditors and unsecured loans are subject to confirmation, reconciliation and adjustments, if any.
3. Some expenses are not fully supported though circumstances evidencing the expenditure exist.
