Note 1: SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Concepts & Convention

The Company follows the Mercantile System of Accounting generally and recognises Income and Expenditure on accrual basis. The Accounts are prepared on historical cost basis as a going concern and are consistent and in consonance with generally accepted accounting principles and the Accounting Standards referred to in Section 133 of the Companies Act, 2013 applicable to Small and Medium - Sized Companies.

2. Property, Plant & Equipment And Depreciation

2.1. Tangible Assets

Property, Plant & Equipment are stated at cost less accumulated depreciation. Cost of acquisition/ construction and subsequent improvements thereto include freight, duties, taxes and other incidental expenses incurred (net of GST Credit, wherever applicable) until installation/commissioning of the asset.

2.2. Intangible Assets

Intangible Assets are stated at cost of acquisition less accumulated Depreciation/Amortization. This includes Computer Software packages purchased separately, if any.

2.3. Date put to use in case of additions to Property, Plant & Equipment is as certified by the Management and being of technical nature accepted without verification.

2.4. Depreciation & Amortisation

The Company has adopted the useful life as specified in Schedule II of the Companies Act 2013. Hence, depreciation on tangible assets, other than land, is provided over the estimated useful life of the assets, in accordance with the Schedule II of the Companies Act, 2013.

2.5. Profit/Loss on Sale of Property, Plant & Equipment is transferred to Statement of Profit & Loss.

2.6. Expenditure during Construction Period:

Expenditure incurred during implementation of new/expansion project is included under Capital Work in Progress and the same is allocated to the respective Property, Plant & Equipment on completion/erection.

3. Impairment of Property, Plant & Equipment

At each Balance Sheet date, the management makes an assessment of any indicator that may lead to impairment of Asset. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value substantially, which is higher of net selling price and value in use. Any impairment loss is charged to statement of profit and loss in the year in which it is identified as impaired.

Raw materials, packing materials and stores, if any, are valued at cost. The cost includes purchase price, inward freight and other incidental expenses net of refundable duties, levies and taxes , where applicable.

Work in Progress is valued at input material cost plus conversion cost as applicable.

Finished goods are valued at lower of net realisable value and prime cost, excise duty and other overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at the lower of cost (including prime cost, excise duty and other overheads incurred in bringing the inventories to their present location and condition) and/or estimated net realisable value, after providing for obsolescence, where appropriate. The comparison of cost and net realisable value is made on an item-by-item basis.

5. Trade Receivables and Loans and Advances

Trade Receivables and Loans and Advances are stated after making adequate provision for doubtful debts and advances wherever required.

6. Investments

Long Term Investments are stated at Cost.

7. Revenue Recognition

Revenue from sale of goods is recognised when significant risks and rewards of ownership are transferred to the buyer, generally on dispatch of goods, and is net of returns, trade discounts, and applicable indirect taxes in line with AS-9.

Revenue from sale of goods and sale of scrap is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of sales tax/ vat/gst and net of trade discounts and sales returns.

As informed, the management is following Exclusive Method for accounting tax, duty, etc. and accordingly Sales have been stated on that basis as per Schedule III of Companies Act, 2013 a AS-2 issued by ICAI.

8. Purchases

As informed, the management is following Exclusive Method for Purchases in respect of Raw Materials/ Finished Products/ Trading Goods in every Financial Year.

9. Foreign Currency Transactions

Foreign Currency Transactions are recorded at the rate of exchange prevailing on the date of the transactions. The realised gains and losses on foreign exchange transaction are recognised in Statement of Profit & Loss.

10. Taxes on Income

The Company provides and determines current tax as the amount expected to be paid to the tax authorities, using applicable tax rates and laws.

The Company provides and recognises deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

Deferred tax assets on unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise such assets.

11. Employee Benefits

Short-Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short-term employee benefits, which include benefits like salaries, wages, short-term compensated absences and performance incentives and are recognised as expenses in the period in which the employee renders the related service.

Post Employment Benefits

Contributions to defined contribution schemes such as Provident Fund, ESI, etc., are recognised as expenses in the period in which the employee renders the related service. In respect of contributions made to government administered Provident Fund, the Company has no further obligations beyond its monthly contributions.

Retirement Benefit

Long Term Employee Benefits are recognised as an expense in the statement of Profit and Loss for the year based on report of Actuarial Valuation towards gratuity. The expenses are recognized at the present value of the amounts payable determined using actuarial valuation techniques.

12. Borrowing Costs

Borrowing Costs that are attributable to the acquisition, construction or installation of a qualifying asset are capitalised as a part of the cost of such asset. Other borrowing costs are charged to Statement of Profit & Loss as incurred during the year.

13. Contingent Liabilities/Income

Contingent Liabilities, if any, are determined on the basis of available information and are disclosed by way of Notes to the Accounts.

14. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit for the year 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 before tax.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

15. Other Notes

1. Disclosed as “Annexure A” are amounts that are are due to Micro and Small Enterprises for a period exceeding 45 days as defined in Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company and are further disallowed during the computation of Income Tax subject to the provisions mentioned under section 43B(h) of the Income Tax Act, 1961 :

2. In the opinion of the Management and to the best of their knowledge and belief, the realisable value of Current Assets, Loans and Advances, in the ordinary course of business would not be less than at which they are stated in the Balance Sheet.

3. The Company is small and medium sized company as defined in the Companies (Accounting Standards) Rules, 2006. Accordingly, the company has complied with the Accounting Standard as applicable to a small and medium sized company.

4. Deferred Tax Liability has been provided in accordance with Accounting Standard 22 as issued by ICAI.

5. The balances in the accounts of customers, suppliers and others are subject to confirmation and reconciliation.

6. Previous Year's figures have been regrouped/ rearranged wherever necessary.

7. The preparation of financial statement requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialized.

8. Net Profit of the company is over the threshold limit set out in section 135 of the Companies Act, 2013. Hence the provision of section 135 of the Companies Act is applicable in FY 2024-25. Accordingly, the company has made provision of Rs. 12.75 lakhs towards CSR Expenditure which is two percent of the average net profit of the immediately preceding the three financial years. The Company is in the process of identifying suitable projects for utilisation of this amount in the areas of education and rural development. Any unspent CSR amount, if any, shall be transferred as per Section 135(5) of the Act.

9. The company has allotted bonus shares on May 08, 2024 in the ratio of 2:3 of Rs. 10/-each held in the company. The Basic and Diluted EPS per share has been calculated for the current year and previous year after taking into account the bonus issue as required by AS-20 “Earnings Per Share “.