Accounting Policies of Shri Bholanath Carpets Ltd. Company

Mar 31, 2024

I SIGNIFICANT ACCOUNTING POLICIES:

(i) Company Information

Shri Bholanath Carpets Limited ("the company") is a limited company incorporated and domiciled in India and has its registered office in Kanpur, India,

The Company is engaged in the business of manufacturing of textile flooring. Productions takes place at the factory in Bhadohi, U.P,

Basis of Preparation of Financial Statements:

The financial statements has been prepared under the historical cost convention under accrual method of accounting and as a going concern, in accordance with the Generali}'''' Accepted
Accounting Principles (GAAP) prevalent in India and the Mandator}'' Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and according to the Provisions of
the Companies Act, 2013,

All assets and liabilities have been classified as current or non -current as per company''s normal operting cycle and other criteria set out in Schedule III of Companies Act,2013, Based on
the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents,the company has ascertained its operating cycle as 12
months for the purpose of classification of current or non-current assets and liabilities,

(iii) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best
knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets
or liabilities in future periods,

(iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is any indication of impairment based on internal/external factors. An asset is treated as
impaired based on the cash generating concept at the year end, when the carrying cost of assets exceeds its recoverable value, in terms of Para 5 to Para 13 of AS-28 ''Impairment of Assets
issued by the Institute of Chartered Accountants of India, for the purpose of arriving at impairment loss thereon, if any. An impairment loss is charged to the profit and loss account in the
year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount,

(v) Revenue Recognition

(a) Revenue from Operation

Sales are recognised when substantial risks and reward of ownership in the goods are transferred to the buyer, upon supply of goods, and are recognised net of trade
discount , rebates , excise duty and vat on goods manufactured,

(b) Dividend Income

Dividend income is recognised in the statement of profit or loss on the date:-

* When the Company’s right to receive the payment is established,

* The amount of dividend can be reliabily measured,

(c ) Other Income

Other Income Recognised in the books of accounts as and when it was relaised,

(vi) Pro pretv, Plant & Equipment and Depreciation :

(a) Valuation:

As per the Company''s policy Property, Plant 8s Equipment including intangible assets are stated at their original cost of acquisition including taxes (Other than those taxes whose InputTax
Credit is available), freight and other incidental expenses related to acquisition and installation of the concerned assets Less depreciation till date.

The registration and ownership of all the immovable properties/Assets owned by the Company are done in the name of the Company only other than those which are specifically mentioned,
in the Notes,

fbl Depreciation:

Depreciation is provided on the straight-line method based the useful lives of the assets prescribed under Schedule II of Companies Act,2013, Depreciation on additions is provided on a pro¬
rata basis from the month of installation or acquisition. Depreciation on deductions/ disposals is provided on pro rata basis upto the month preceding the month of decuction/ disposal.

Assets costing less than Rs, 5,000/- are expensed off at the time of purchase,

(vii) Investments:

Investment, Which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All
other investments are classified as non-current investments.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However,
provision for diminution in value is made to recognize a decline other than temporal}'' in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss,

(viii) Inventories :

Finished inventor}'' are stated at the lower of the cost and net reliasable value. Cost is ascertained on a weightage average basis. Cost comprise direct material and, where applicable, direct
labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net reliasable value is the price at which the inventories can be
realised in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling 8s Distribution, Raw
material are valued at cost,

(ix) Borrowing Cost :

Borrowing costs that are attributable to the acquisition or construction of the qualifying assets are capitalized as part of the cost of such assets, A qualifying assets is one that necessarily
takes a substantial period of time to get ready for its intended uses or sale. All other borrowing costs are charged to revenue in the year of incurrence,

(x) Taxes on Income :

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1951,

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted by the balance sheet
date. Deferred tax assets arising from timing differences are recognized to the extent there is virtual certainty with convincing evidence that these would be realized in future. At each Balance
Sheet date, the carrying amount of deferred tax is reviewed to reassure realization,

(xi) Prior Period items and Extraordinary items :

Prior period items and extraordinary items are separately classified, identified and dealt with as required under Accounting Standard 5 on ''Net Profit or Loss for the Period, Prior Period items
and changes in Accounting Policies'' issued by the Institute of Chartered Accountants of India,

(xii) Miscellaneous Expenditure :

Miscellaneous expenditure is being amortised and charged to profit and loss A/c, However during the year under consideration there is no expenses as such.

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Mar 31, 2013

(i) Basis of Preparation of Financial Statements:

The financial statements has been prepared under the historical cost convention under accrual method of accounting and as a going concern, in accordance with the Generally Accepted Accounting Principles (GAAP) prevalent in India and the Mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and according to the Provisions of the Companies Act, 1956.

(ii) Inventories :

Stock of goods are valued at cost or market price whichever is less.

(iii) Prior Period items and Extraordinary items :

Prior period items and extraordinary items are separately classified, identified and dealt with as required under Accounting Standard 5 on ''Net Profit or Loss for the Period, Prior Period items and changes in Accounting Policies'' issued by the Institute of Chartered Accountants of India.

(iv) Depreciation and Amortisation :

a Depreciation has been provided on SLM method at the rates specified in Schedule XIV of the Companies Act, 1956.

b Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year.

c No Assets Sold During The year, depreciation is not provided on such assets during the year.

d Individual assets acquired for Rs.5,000/- and below are fully depreciated in the year of acquisition.

(v) Revenue Recognition :

Turnover of the company both manufactured and traded have been recognised on the basis of actual delivery of goods.

(vi) Fixed

Assets :

All Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. Additional cost relating to the acquisition and installation of fixed assets are capitalized.

(vii) Borrowing Cost :

All borrowing costs are expensed as incurred.

(viii) Segment Reporting :

The Company has complied with Accounting Standard 17 - ''Segment Reporting'' with Business as the primary segment.

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Mar 31, 2012

(i) Basis of Preparation of Financial Statements:

The financial statements has been prepared under the historical cost convention under accrual method of accounting and as a going concern, in accordance with the Generally Accepted Accounting Principles (GAAP) prevalent in India and the Mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and according to the Provisions of the Companies Act, 1956.

(ii) Inventories:

Stock of goods are valued at cost or market price whichever is less.

(iii) Prior Period items and Extraordinary items :

Prior period items and extraordinary items are separately classified, identified and dealt with as required under Accounting Standard 5 on ''Net Profit or Loss for the Period, Prior Period items and changes in Accounting Policies'' issued by the Institute of Chartered Accountants of India.

(iv) Depreciation and Amortisation :

a Depredation has been provided on SLM method at the rates specified in Schedule XIV of the Companies Act, 1956.

b Depreciation on new assets acquired during the yearis provided at the rates applicable from the date of acquisition to the end of the financial year.

c No Assets Sold During The year, depreciation is not provided on such assets during the year, d Individual assets acquired for Rs.5,000/- and below are fully depreciated in the year of acquisition.

(v) Revenue Recognition :

Turnover of the company both manufactured and traded have been recognised on the basis of actual delivery of goods.

(vi) Fixed Assets :

All Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. Additional cost relating to the acquisition and installation of fixed assets are capitalized.

(vii) Borrowing Cost:

All borrowing costs are expensed as incurred.

(viii) Segment Reporting :

The Company has complied with Accounting Standard 17 - ''Segment Reporting'' with Business as the primary segment.

(ix) Taxation:

i. Income Tax : .

Income Tax is computeckising the tax effect accounting method, where taxes are accrued in the same period as and when the related revenue and expense arise. A provision is made for Income Tax annually based on the tax liability computed after considering tax allowances and exemptions.

ii. Deferred Tax :

The differences that result between the profit calculated for income tax purposes and the profit as per the financial statements are identified and thereafter deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and get reversed in another, based on the effect of the aggregate amount being considered. Deferred Tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. The tax effect is calculated on the accumulated timing differences at the beginning of this accounting year based on the prevailing enacted or substantially enacted regulations.

(x) Impairment:

The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is any indication of impairment based on internal/external factors. An asset is treated as impaired based on the cash generating concept at the year end, when the carrying cost of assets exceeds its recoverable value, in terms of Para 5 to Para 13 of AS-28 Impairment of Assets issued by the Institute of Chartered Accountants of India, for the purpose of arriving at impairment loss thereon, if any. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

(xi) Miscellaneous Expenditure :

Miscellaneous expenditure is being amortised and charged to profit and loss A/c. However during the year under consideration there is no expenses as such.

(xii) Provisions. Contingent Liabilities and Contingent Assets :

A provision is recognized when the company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reiiable estimate can be made of the amount of the obligation.

Contingent liabilities are not provided for unless a reliable estimate of probable outflow to the company exists as at the Balance Sheet date. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

The accounts and financial statements have been prepared on historical cost basis under mercantile system and on the accounting principle of Going Concern; Accounting policies not specifically referred to otherwise be consistent and in consonance with generally accepted accounting principles.

b) Revenue Recognition :

Income & Expenditure have been accounted on accrual basis.

c) Depreciation on Fixed Assets :

Depreciation on Fixed Assets has been computed on prorate basis on straight-line method rates as specified in Schedule XIV to the Companies Act, 1956.

d) Inventories:

i) Raw materials are valued at Cost.

ii) Packing Materials, Consumable stock and spares are valued at weighted average cost.

iii) Stock in Process is valued at cost of raw material and other material at weighted average cost.

iv) Finished goods are valued at lower of cost or market value.

v) Wool wastes are valued at selling rate approved by excise authorities.

e) Gratuity:

Provision for gratuity is made on the basis of premium paid to LIC under Group Gratuity Scheme in terms of the provisions of the Payment of Gratuity Act, 1972.

f) Fixed Assets:

Fixed assets are stated at cost of acquisition/construction including cost relating to bringing the assets into uses less reimbursement of CST and accumulated depreciation. The machinery and other assets being installed during Phase-II has been kept under capitalization.

g) Foreign Currency Transaction :

The transactions in foreign currency arising on actual conversion in 1NR are recorded in the books of accounts on realization/payment basis at the prevailing exchange rate at the time when such transaction took place.

At the end of financial year, all balances in foreign currency are converted in INR on prevailing currency conversion rate for preparation of financial statements. The variations, if any, are charged/added to revenue account under respective head of account.

Transaction in foreign currency in respect of purchase and sales are recorded at the rates of prevailing currency conversion at the time of receipt of issues during the year. The variation in currency conversion rate at the time of actual payment against purchase and receipt of export proceeds are adjusted to purchase and sale respectively together with amount of currency variation for all branches of creditors and debtors, while preparing financial statements.

h) Export incentive/CST refund. Insurance & Other claims :

Export incentive, Central Sales Tax Refund, Insurance & other claims are accounted for on accrual basis on book value till amount settled.

i) Interest before commencement of commercial Production:

Amount of interest of capital work-in-progress is capitalized proportionately to the Gross Block inclusive of interest on deferred payment.

j) Sale proceeds of Wool waste :

The wool wastes are accounted for on generation at prevailing market rate approved by excise authorities.

k) Other Accounting Policies:

These are consistent with the generally accepted accounting policies/practices.