Significant Accounting Policies and Notes Forming Part of
Accounts
A) Basis of Preparation of Financial Statements
The financial statements are prepared for the period from
01.04.2024 - 31.03.2025 under the Historical cost convention as
a going concern. The company follows the mercantile system of
accounting recognizing income and expenditure on accrual basis.
Accounting policies not referred to specifically are consistent with
Generally Accepted Accounting Principles and Accounting
Standards. The Company is Small and Medium Company (SMC)
based on the Companies (Accounting Standard) Rules, 2014
notified and accordingly the company has complied with all
Accounting Standards applicable to a SMC.
The Standalone Financial Statements have been presented in
Indian Rupees (INR), which is the Company's functional currency.
All financial information presented in INR has been rounded off to
the nearest two decimals of hundreds.
These financial statements are approved for issue by the Board
of Directors on 29.05.2025.
B) Statement of compliance
Company has prepared its financial statements using the existing
standards in view of the guidelines that Companies whose
securities are listed on SME exchanges and MSME company,
(which does not meet the net worth criteria as prescribed) shall
not be required to apply Ind AS. And such companies shall
continue to comply with the existing Accounting Standards
prescribed in Annexure to the Companies (Accounting Standards)
Rules, 2006, unless they choose otherwise.
Accounting policies have been consistently applied except where
a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.
C) Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period end. Although these
estimates are based upon management's best knowledge of
current events and actions, actual results could differ from these
estimates.
D) Revenue Recognition
1. Sales are recognized, net of taxes, returns and trade discounts,
on transfer of significant risks and rewards of ownership to the
buyer, which generally coincides with the delivery of goods to
customers. Sales include delayed payment charges.
2. Revenue from services is recognised when the provision of
services is complete and there is either no unfulfilled obligations
on the Company or unfulfilled obligations are inconsequential or
perfunctory and will not affect the customer's final acceptance of
the services.
3. Rent Income, Interest income and Other Income is recognised on
its accrual.
E) Property, plant and equipment
1. Tangible Fixed Assets such as Buildings, plant and machinery,
vehicles, furniture and office equipments are stated at cost less
accumulated depreciation. The cost of a property, plant and
equipment comprises its price at a value which have been
attributable to them on conversion of partnership firm in to a
company.
2. There are no Intangible Assets with the company.
F) Depreciation and Amortisation
Depreciation on property, plant and equipment is provided under
the written down value method over the useful lives of assets as
prescribed under Part C of Schedule II to the Companies Act,
2013.
G) Inventories
1) Inventories includes Raw materials, Work in process and the
finished goods etc. The same are valued at the lower of cost (on
FIFO basis) or the net realisable value. Cost includes all charges
in bringing the goods to the point of sale. Finished goods include
appropriate proportion of overheads.
H) Borrowing Cost
Borrowing cost that are attributable to the acquisition or construction of
qualifying assets are capitalized as a part of such assets. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. Other borrowing costs are recognised as
expense in the period in which they are incurred.
I) Provision of taxes on income
Tax expense comprises both current and deferred tax in accordance
with the requirements of Accounting Standard 22 - Accounting for
taxes on Income.
1. Current Tax
Current Tax is measured at the amount expected to be paid to the tax
authorities, using the tax rate and tax laws applicable for the year.
2. Deferred Tax
Deferred Tax is recognized on timing differences being the differences
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets are not recognized on unabsorbed depreciation
and carry forward of losses unless there is a virtual certainty supported
by convincing evidence that sufficient taxable profits will be available
against which such deferred assets can be realized.
J) Employee Benefits
As per the relevant Tax law, all the eligible employees must receive
benefits from a ESI, which is a defined contribution plan. Both the
employees and employer each should make monthly contributions to
the plan. We believe that the company will have no further obligations
under the plan beyond its monthly contributions, if paid correctly and
consistently. Contribution to the extent paid by the company are
charged to Profit and Loss account. The company does not have a
policy on payment of Gratuity and leave encashment for its employees.
K) Earnings Per Share
In determining the earnings per share, the Company considers the net
profit after tax before extraordinary item and after extraordinary items
and includes post - tax effect of any extraordinary items. The number
of shares used in computing the basic earnings per share is the
weighted average number of shares outstanding during the period. For
computing diluted earnings per share, potential equity shares are
added to the above weighted average number of shares.
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