NOTES : - 23 SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS

(1) SIGNIFICANT ACCOUNTING POLICIES : -

i) METHOD OF ACCOUNTING : -

a) BASIS OF PREPARATIONOF FINANCIAL STATEMENTS : -

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

b) USE OF ESTIMATES : -

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include future obligations under employee retirement benefit plans, income taxes, scrap value of fixed assets and useful lives of fixed tangible assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surrounding the estimates. Change in estimates are reflected in the financial statements in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

ii) INVENTORIES : -

Inventories comprise Stock in trade and packing materials. These are valued at lower of cost and net realizable value after providing for obsolescence and other losses, where considered necessary. Cost is determined as follows : -

? Stock-in-Trade > At Cost

* Packing Materials and Consumables > At Cost

iii) REVENUE RECOGNITION : -

Revenue is primarily derived from sale of traded goods. Revenue from sales is recognized on transfer of significant risks and rewards to the buyer as per the terms of arrangement with the buyer. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. The company presents net of indirect taxes in its statement of profit and loss.

Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sale price and carrying value of the investment. Interest is recognized using the time proportion method, based on rates implicit in the transaction. Dividend income is recognized when the company’s right to receive dividend is established.

iv) PROVISIONS, CONTINGENT LIABILITIES AND ASSETS : -

A provision is recognized when there exists a present obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to present value and are determined based on best estimates required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed only by the occurrence or non occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably, the Company does not recognize a contingent liability but discloses its existence in the financial statements.

v) TANGIBLE ASSETS AND CAPITAL WORK-IN-PROGRESS : -

Tangible assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until such assets if any, are ready for use. Capital work-in-progress if any, comprises direct cost, related incidental expenses and attributable interest, if any.

vi) INTANGIBLE ASSETS : -

Intangible assets if any, are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Research costs are expensed as incurred. Product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, and the Company has an intention and ability to complete and use or sell the product and the costs can be measured reliably.

vii) DEPRECIATION AND AMORTIZATION : -

Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets as prescribed under Part - C of Schedule II of the Companies Act, 2013. Depreciation for assets purchased / sold during a period is proportionately charged.

Intangible assets if any, are amortized over their respective individual useful lives as prescribed under Part - C of Schedule II of the Companies Act, 2013 on straight-line basis, commencing from the date the asset is available to the Company for its use.

Depreciation and Amortization methods, useful lives and residual values are reviewed periodically at each financial year end.

viii) IMPAIRMENT : -

The management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the assets not selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

ix) FOREIGN CURRENCY TRANSACTION : -

Foreign currency denominated monetary assets and liabilities if any, are translated at exchange rate in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction. Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

x) RESERCH AND DEVELOPMENT EXPENDITURE : -

Revenue expenditure pertaining to research if any, is charged to Statement of Profit and Loss. Development costs of products are also charged to the statement of Profit and Loss / Reserve for Business restructure unless a product’s technological feasibility and commercial viability has been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use. Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for tangible fixed assets and intangible fixed assets.

xi) INCOME TAXES : -

Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is convincing evidence that the company will pay normal tax in future and the resultant asset can be measured reliably. The company offsets, on a year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing difference at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in situation where unabsorbed depreciation and carry forward business loss exists, are recognized only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax asset, other than in situation of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date. Deferred tax assets and deferred tax liabilities have been offset wherever the company has legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by same taxation authority. The income tax provision for the interim period is made based on the best estimate of annual average tax rate expected to be applicable for full financial year.

The Company has made provision for Income Tax of Rs. 11192205/= (Rupees one crore eleven lac ninety two thousand two hundred five only).

DEFERRED TAX : -

Pursuant to the Accounting Standard for "Taxes on Income (AS - 22), Deferred Tax Assets of Rs. 144942/- arisen during the year has been recognised and Credited to Profit & Loss Account.

The Company has, based on its operational parameters and future earnings, recognised Deferred Tax Assets as above. The management is of the view that sufficient future taxable income will be available against which such Deferred Tax Assets can be realised.

xii) EARNING PER SHARE : -

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity share outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior period for approval of financial statements by the Board of Directors.

xiii) INVESTMENTS : -

Trade investments are the investments made to enhance the company’s business interests. Investments are either classified as current or long term based on management’s intention. Current investments are carried at the lower of cost and fair value of each investment individually. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long term investments are carried at the cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

xiv) CASH AND CASH EQUIVALENTS : -

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

xv) CASH FLOW STATEMENT : -

Cash flows are reported using the indirect method, whereby 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 receipt or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated based on the available information.