Schedule – 12

Significant Accounting Policies & Notes to the Accounts

A. Significant Accounting Policies:

1. Basis of preparation of financial statement:
The Financial Statements are prepared under going concern assumption, on Historical
Cost Convention and on an Accrual Concept and are in accordance with Nepal
Accounting Standards and others applicable laws prevalent in Nepal. The accounting
policies are consistently applied by the company.

2. 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 revenue & expenses during the reporting period.

3. Property, Plant & Equipment and Depreciation:

I. Properties, Plant & Equipment are stated at cost inclusive of all expenses
incurred in commissioning/ putting them into use, less accumulated
depreciation.
II. Depreciation on Property, Plant & Equipment has been charged on Written
down Value (WDV) Method as per the rates prescribed in the Income Tax Act
2058.

4. Revenue Recognition:
Revenue from the sale of goods is recognized in the income statement when the
significant risks and rewards of ownership have been transferred to the buyer.

B. Notes to Accounts:

i. Cash & Cash Equivalents:

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise of Cash in
hand and balance held in current bank accounts.

ii. Provision for Income Tax:

Provision for income tax has been made as prescribed by Income Tax Act, 2058.
However the actual liabilities may differ after final assessment.

iii. Earnings Per Share:

Basic earnings per share (EPS) is calculated by dividing the net profit or loss for the
period attributable to equity shareholders by the weighted average number of equity
 shares outstanding during the period. Earnings considered in ascertaining the
Company’s earnings per share is the net profit for the period after taxes.

The fact that the company is still a loss-making one as it is under its initial year of
production, the EPS calculation has not been presented.

iv. Provision and Contingent Liabilities:

Contingent Liabilities are disclosed in respect of possible obligations that arise from past
events but their existence will be confirmed by the occurrence or non-occurrence of one
or more uncertain future events not wholly within the control of the Company or where
any present obligation cannot be measured in terms of future outflow of resources or
where a reliable estimate of the obligation cannot be made.
A provision is made based on a reliable estimate when it is probable that an outflow of
resources embodying economic benefits will be required to settle an obligation and in
respect of which a reliable estimate can be made. Provision is not discounted and is
determined based on best estimate required to settle the obligation at the year-end
date. Contingent Assets are not recognized or disclosed in the financial statements.

v. All amounts are in Nepalese Rupees unless otherwise specified therein.

Sameer Niraula Rajesh

Shrestha

S. Niraula & Associates Lasakusa Food Products Pvt.

Ltd.

Place: Kathmandu Place: Kathmandu