Significant Accounting Policies and Notes to Accounts
1. Corporate Information/Background
Associated Coaters Private Limited (“the Company''), is a Company limited by shares and was originally incorporated on 22nd December 2017.Further the company was converted into a Public Limited Company and consequently the name was changed to Associated Coaters Limited with effect from 19th December, 2023 approved via board resolution number 4 dated 1st October, 2023 It is involved in business of metal coating. The registered office of the company is located Ashuti Khanberia Maheshtala LP 20/83/46, Kolkata, Vivekanandapur, South 24 Parganas, Thakurpukur Mahestola, West Bengal, India, 700141
The Company Has Made an Initial Public Offer, The Issue Opening Date Was May 30, 2024 and The Issue Closing Date Was June 3, 2024. The Company Got Listed on BSE SME Platform During the Financial Year 202425 W.E.F June 6, 2024. The Company Has Raised Rs. 510.62 Lakhs Through Issue Of 4,22,000 No. Of Equity Shares at A Price of Rs.121 Per Share
Summary of significant accounting policies
A. Basis of Preparation of Financial Statements.
The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on an accrual basis and on the principles of going concern. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.
All the Assets and Liabilities have been classified as Current and Non-Current as per company's normal operating cycle and other criteria set out in Schedule III of the Company's Act, 2013. The company has ascertained its operating cycle as 12 months for the purpose of current, non-current classifications of Assets and Liabilities.
B. Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the results of operations during the reporting period end.
Accounting Estimates could change from period to period; actual results could differ from the estimates. Appropriate changes are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in the notes to financial statements.
C. Current-Non-Current Classification Assets
An asset is classified as current when it satisfies any of the following criteria:
i) It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle;
ii) It is held primarily for the purpose of being traded;
iii) It is expected to be realized within 12 months after the reporting date; or
iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All other assets are classified as noncurrent.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
i) It is expected to be settled in the Company's normal operating cycle;
ii) It is held primarily for the purpose of being traded;
iii) It is due to be settled within 12 months after the reporting date;
iv) The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
D. Property, Plant and Equipment
I. Tangible assets
Tangible Assets are capitalized at acquisition cost, including directly attributable cost of bringing the assets to its working condition for the intended use and are stated at capitalized cost less accumulated depreciation and impairment loss (if any).
Factory Premises Not Owned by the Company
The Company's business operations are conducted from factory premises that are not owned by the Company. The specific factory premises are located is located at LP, 4/84/4, Ganipur Maheshtala, B.R. Road(W) Kolkata, West Bengal, India 700141 Ganipur, Maheshtala, 24 Parganas 743352These factory premises are leased from Mr. Jagjit Singh Dhillon, the Company's promoter and Managing Director, who is the owner of the properties.
Potential Impact on Business Operations
In the event that the Company is required to vacate the current premises, it would necessitate securing alternative factory locations and infrastructure. There is no assurance that such new arrangements can be made on commercially acceptable or favourable terms. A forced relocation of business operations could result in operational disruptions and potentially higher rental costs. These factors could have an adverse effect on the Company's business, prospects, results of operations, and financial condition
II. Intangible assets
The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the results of operations during the reporting period end.
Accounting Estimates could change from period to period; actual results could differ from the estimates. Appropriate changes are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in the notes to financial statements.
E. Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. Based on the above definition and nature of business, the company has ascertained its operating cycle as less than 12 months for the purpose of current / non-current classification of assets and liabilities
F. Depreciation on property, plant and equipment
(i) Tangible Assets Depreciation on PPE is provided on written down value method as prescribed in Schedule II to the companies Act, 2013. Depreciation on Assets is provided on Pro-rata basis.
(ii) Intangible Assets Intangible Assets are amortized over the useful life of 5 years on a straight-line basis.
G. Inventories
Inventories are valued at the lower of Cost and Net realizable value. Cost of inventories comprises cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories are computed using weighted average cost formula, except is case of inventories which is individually identifiable in which case the actual cost of inventory is taken.
H. Investments
Investments are classified as current and non-current based on management intention to hold the investment for a long or short period. Non-current investments are valued at cost. Current investments are valued at cost or fair value, whichever is lower.
I. Borrowing Costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to get ready for its intended use are capitalized. All other borrowing costs are recognized as expenditures in the period in which they are incurred.
J. Revenue recognition
Revenue / Incomes and Costs / Expenditures are accounted for on accrual basis.
Revenue is recognized when significant risk and reward with respect to ownership of goods have been transferred to the buyer and it is probable that the economic benefits will flow to the company.
Interest Income
Interest Income is recognized on a time proportion basis taking into account the amount outstanding and applicable interest rate.
K. Retirement and other employee benefits Defined contribution plan
The Company makes defined contribution to Government Employee Deposit Linked Insurance and ESI, which are recognised in the Statement of Profit and Loss on accrual basis. The Company has no further obligations under these plans beyond its monthly contributions.
Defined Benefit Plan- Gratuity
The company has a defined benefit plan for post-employment benefit in the form of Gratuity.
Liability for the above defined benefit plan is provided on the basis of valuation, as at balance sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit Method.
L. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks.
M. Taxes On Income
Tax expenses comprise of Current and Deferred taxes. Current Income Tax is determined as per the provisions of the Income Tax Act in respect of Taxable Income for the year. Deferred Tax arising on account of “timing differences” and which are capable of reversal in one or more subsequent periods is recognized, using the tax rates and tax laws that are enacted or subsequently enacted Deferred Tax Assets is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as to matter of prudence.
N. Contingent Liability, Provisions and Contingent Asset
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes.
O. IPO Expenses
Treatment of Initial Public Offering (IPO) Expenses
The Company Has Made an Initial Public Offer, The Issue Opening Date Was May 30, 2024 and The Issue Closing Date Was June 3, 2024. The Company Got Listed on BSE SME Platform During the Financial Year 2024-25 W.E.F June 6, 2024, the Company also incurred expenses related to its Initial Public Offering (IPO). The treatment of these IPO expenses is as follows:
Classification of IPO Expenses: IPO expenses include fees paid to underwriters, legal advisors, auditors, regulatory bodies, printing and distribution costs, advertising and marketing expenses, and other related costs.
Accounting Treatment: In accordance with applicable accounting standards and regulations, IPO expenses have been accounted for as follows:
o Directly Attributable Costs: Expenses that are directly attributable to the issuance of new shares, such as underwriting fees, legal fees, and regulatory filing fees, have been transferred to the reserves.
o Other IPO-related Expenses: Expenses that are not directly attributable to the issuance of new shares, such as general advertising and promotional costs, have been charged to the profit and loss account as incurred.
Disclosure: The total IPO expenses incurred during the year has been transferred to reserves
P. Previous Year Figure
The Company has reclassified, rearranged previous Year's figures wherever required to confirm with current year's classification and figure are nearest to rupee.
Q. Confirmation of balance
The company expects TDS to be deducted on certain income earned during the fourth quarter of the financial year 2024-25. However, the exact amount of TDS receivable could not be ascertained as of the date of finalization of these financial statements, pending availability of Form 26AS and relevant TDS certificates. The company will account for the same in the subsequent financial period upon verification.
R. In some Cases, Confirmation of balance due from sundry Debtors, Advances and Sundry Creditors, advance received etc. are not available and the same have been taken as per books
S. Earnings Per Share
Related Party disclosure as identified by the management in accordance with the Accounting Standard-18 issued by the Institute of Chartered Accountants of India. Refer Note 21 of the Financial statements.
T. A.Earnings Per Share
Basic Earnings per Share is calculated by dividing the net profit/loss for the period attributable to shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating of diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects for all dilutive potential equity shares.
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