Accounting Policies of Quest Laboratories Ltd. Company

Mar 31, 2024

A. ACCOUNTING POLICIES

1. Accounting Convention

The Financial statements have been prepared in accordance with the historical cost convention on an accrual basis and comply with the applicable Accounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard - 30 on Financial Instruments to the extent it does not contradict with any other Accounting Standard.

These Financial Statements have been prepared as required under relevant provision of the Companies Act, 2013 and the presentation is based on the Schedule III of the Companies Act, 2013.

2. Fixed Assets and Depreciation

Fixed Assets are stated at cost of acquisition/construction.

Tangible Assets are carried at cost of acquisition less accumulated depreciation and accumulated impairment losses, if any. The costs of acquisition of assets are inclusive of all the rates taxes and freight paid less any taxes or input receivables.

Depreciation

During the year Company has charged Depreciation as per Straight line method on the basis of single shift at the rates and in the manner prescribed in Schedule II of the Companies Act 2013.

3. Revenue Recognition

Sales are recognized when significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of contract. Provisions for sales returns and other off invoice allowances relating to that year’s sale are offset from sales. Other incomes are recognized on accrual basis.

4. Inventories

Inventories, other than stores and spares are stated at cost or net realizable value whichever is lower. Stores and spares are carried at cost; provision is made for obsolete, slow-moving and defective stocks, wherever necessary. Cost is determined on FIFO method for all categories of inventories. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its present location and condition.

5. Impairment of assets

An Asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is normally charged to Profit& Loss account in the year in which an asset is identified as impaired. The Company holds no asset whose carrying cost exceeds its recoverable value as on 31/03/2024.

6. Borrowing cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of such assets. Borrowing costs include amortization of issue &ancillary costs relating to the borrowings which are appropriately amortized over the expected term of the borrowing.

7. Employee Benefit Expenses

Employee benefits are accounted for on accrual basis. Liabilities for compensated absences are determined based on independent valuation at year end and charge is recognized in the statement of profit and loss.

8. Accounting For Taxes On Income

Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with local laws of various jurisdiction.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences that result between taxable profit and the profit as per the financial statement. Income Tax liability has been computed under Minimum Alternate Tax (MAT). The excess tax paid under MAT provisions being over and above regular tax liability can be carried forward for a period of ten years from the year of recognition and is available for set off against future tax liabilities computed under regular tax provisions, to the extent of MAT (i.e. Minimum 15% tax of Book Profit). The difference of tax payable on normal provision and the MAT provision is Booked as MAT credit entitlement^ During the year amount of Rs 4,20,66,551.25/-has been recognized as provision for income tax and Rs 14,53,580.94/- as provision for Deferred Tax Liability)