Shreenath Paper Products Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian
GAAP). The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under the
section 133 of the Companies Act, 2013 read together with rule 7 of the Companies (Accounts) Rules 2014 and Companies (accounting
standards) amendment rules 2016. The financial statements have been prepared on an accrual basis and under the historical cost
convention. The accounting policies have been consistently applied by the company and are consistent with those used in the previous
year.

The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in respect of Accounting Standards
notified as per sub-section (1) of section 129 of the Companies Act, 2013. Accordingly, the Company has complied with the Accounting
Standards as applicable to a Small and Medium Sized Company.

All the amounts included in the Financial Statements are presented in Indian Rupees (''Rupees'' or ''Rs.'' Or ''INR'') and are rounded to the
nearest Lakhs, except per share data and unless stated otherwise.

b Use of Estimates

The preparation of financial statements in conformity with the Indian GAAP requires the management of the Company to make estimates
and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the
date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include
provisions for doubtful receivables, provision for income taxes, the useful lives of depreciable fixed assets and provision for impairment.
Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are
recognised in the period in which the results are known/ materialise,
c Property, Plant and Equipment

Property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment, if any. Property, plant
and equipment is depreciated on a straight-line value basis to its residual value over its estimated useful life.

Cost directly attributable to acquisition are capitalised until the property, plant and equipment are ready for use, as intended by the
management.

Subsequent costs are capitalised on the carrying amount or recognised as a separate asset, as appropriate, only when future economic
benefits associated with the item are probable to flow to the Company and cost of the item can be measured reliably. When significant
parts of property, plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their
specific useful lives. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All repair
and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital
advances under the non-current assets and the cost of assets not ready to use before such date are disclosed under ''Capital work in
progress''.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss on the date of disposal or
retirement.

d Intangible assets

Separately acquired intangible assets, such as software are measured initially at cost. Following initial recognition, intangible assets are
carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding
capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the
expenditure is incurred. Intangible assets with finite useful lives are carried at cost and are amortised on a written down value basis over
their estimated useful lives and charged to statement of profit and loss.

The amortization period and the amortization method are reviewed at least at each financial year end. Changes in the expected useful life
or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation
period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets is
recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

e Depreciation and amortization

Depreciation and amortisation are provided using the written down value method and charged to statement of profit and loss as per the
useful life prescribed under Schedule II of the Companies Act, 2013.

f Impairment of assets

An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no
longer exist or have decreased. If such indication exists, the Company estimates the asset''s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since
the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in financial year,
g Investment

i) Investments, 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 long-term investments.

ii) On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition
charges such as brokerage, fees and duties.

iii) 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 temporary
in the value of the investments.

iv) The cost of investments comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

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

h Inventories

i) Raw materials, packing materials and stores & spares are valued at lower of cost and net realizable value. Cost of raw materials, packing
materials are determined on First in First out (FIFO) basis and cost of stores & spares are determined on weighted average cost method.

ii) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated
costs necessary to make the sale.

i Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to
an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash
equivalents.

j Capital Work in Progress

Cost and direct expense incurred for construction of assets or assets to be acquired and which are not ready for use are disclosed under
"Capital Work-in-progress".

k Lease

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership
are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the
minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and
the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as
operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis.

I Revenue recognition

Revenue is measured based on the consideration specified in a contract with a customer net of variable consideration e.g. discounts,
volume rebates, any payments made to a customer (unless the payment is for a distinct good or service received from the customer) and
excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service
to a customer. Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.

The Company provides incentives to its users in various forms. Incentives which are consideration payable to the customer that are not in
exchange for a distinct good or service are generally recognized as a reduction of revenue.

Where the Company acts as an agent for selling goods or services, only the commission income is included within revenue. The specific
revenue recognition criteria described below must also be met before revenue is recognized. Typically, the Company has a right to
payment before or at the point that services are delivered. Cash received before the services are delivered is recognised as a contract
liability. The amount of consideration does not contain a significant financing component as payment terms are less than one year.

Sale of Goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the
buyer. Sales are presented net of Excise duty collected on behalf of the Government, trade discounts and returns, as applicable.

Sale of services

Revenue from services is recognized when the control in services is transferred as per the terms of the agreement with customer i.e. as
and when services are rendered. Revenues are disclosed net of the Goods and Service tax charged on such services. In terms of the
contract, excess of revenue over the billed at the year-end is carried in the statement of assets and liabilities as unbilled revenue under
other financial assets where the amount is recoverable from the customer without any future performance obligation. Cash received
before the services are delivered is recognised as a contract liability.

Other operating revenue

Where the Company is contractually entitled to receive daims/compensation in case of non-discharge of obligations by customers, such
daims/compensations are measured at amount receivable from such customers and are recognised as other operating revenue when
there is a reasonable certainty that the Company will be able to realize the said amounts.

Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the statement of profit and loss account,
m Employee Benefits

Post-employment benefit plans

i) Short Term Employee Benefits:

All employee benefits payable within twelve months of rendering the service are classified as short term benefits. Such benefits include
salaries, wages, bonus, short term compensated absences, awards, ex-gratia, performance pay etc. and the same are recognised in the
period in which the employee renders the related service.

ii) Employment Benefits:

a) Provident Fund/ESIC:

The company has not exceed minimum criteria for eligibility to contribute into Defined Contribution Plans & Defined Contribution Plans for
post-employment benefit in the form.

b) Gratuity:

The Payment of Gratuity Act, 1972 is not applicable to the Company up to December 31, 2023 as the number of employees are less than
ten.

n Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of
time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the
period in the statement of profit and loss in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.

o Foreign currency transactions

Functional and presentation currency

Items included in the Financial Information of the Company are measured using the currency of the primary economic environment in
which it operates i.e. the "functional currency". The Company''s financial information is presented in INR.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Company''s at their respective functional currency at exchange rates
prevailing at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the
reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in statement of profit and loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the
dates of the initial transactions.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of
the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in
statement of profit and loss).

p Taxation
Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the
India where the Company operates and generates taxable income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The
Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a
better prediction of the resolution of the uncertainty.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary
differences.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, The carrying amount of deferred
tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax

Credit of MAT is recognised as deferred tax asset only when it is probable that taxable profit will be available against which the credit can
be utilised. In the year in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to
the statement of profit and loss account. The Company reviews the same at each balance sheet date and writes down the carrying
amount of MAT credit entitlement to the extent it is no longer probable that the Company will pay normal income tax during the specified
period.

Taxes paid on acquisition of assets or on incurring expenses

Assets are recognised net of the amount of GST paid, except when the tax incurred on a purchase of assets is not recoverable from the
taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset.

Expenses are recognised net of the amount of GST paid, except when the tax incurred on a purchase of services is not recoverable from
the taxation authority, in which case, the tax paid is expensed off in statement of profit and loss.

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of other current/ non- current assets or
other current liabilities in the statement of assets and liabilities.

q Segment accounting

The Company is engaged in the business of acting as a supply chain management company for printing paper industry, trading of variety of
papers and allied products, there are no separate reportable segment.

r Government grants and subsidies

i) Grants and subsidies from the government are recognized when there is reasonable assurance that (a) the company will comply with the
conditions attached to them, and (b) the grant/subsidy will be received.

ii) Where the grant relates to an asset, it is shown as a reduction from the gross value of the asset concerned in arriving at its book value.
The grant is thus recognised in the statement of profit and loss over the useful life of the asset by way of reduced depreciation charge.

iii) Where the grant relates to reimbursement of interest on term loan, it is recognised as a reduction from the finance cost of the term
loan concerned.