Accounting Policies of Inflame Appliances Ltd. Company

Mar 31, 2025

Summary of significant accounting policies
I. Use of estimates:

The preparation of financial statements has been made in
conformity with generally accepted accounting principles
(GAAP), which requires Management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities on the date
of financial statements. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
in the periods in which the results are known/materialize.

Fixed assets

(i) Property Plant & Equipment

Property plant & equipment are stated at cost of acquisition
less accumulated depreciation and impainnent loss if any.
Cost of acquisition is inclusive of inward freight, insurance,
duties, levies and taxes and incidental expenses related to
acquisition of such assets; Subsidy received against a
specific asset has been reduced from the cost of the said
asset

Intangible Assets:

- Intangible Assets are capitalized at cost if: -

(a) It is probable that the future economic benefits that are
attributable to the asset will flow to the company, &

(b) The company will have control over the assets &

(c) The cost of these assets can be measured reliably & is
more than Rs. 10000/-. Intangible assets are amortized
over their estimated useful life not exceeding 3 years on
straight line pro-rata monthly basis.

Depreciation:

Depreciation on tangible fixed assets has been provided
on the basis of “Written Down Value Method" at the rates
specified in Schedule II of the Companies Act, 2013. The
deprecation amount of an asset is the cost of asset less
residual value. The residual value has been taken at 5%
of the original cost.

Depreciation on addition to/deductions from tangible
assets during the year is charged on pro-rata basis from/up
to the date on which asset is available for use/disposal.

Assets valuing Rs 5000/- or less are fully depreciated
during the year in which asset is made available for use

Investments: -

Investments are stated at cost. Income from Investments
is recognized in the year, in which it is accmed.

Revenue recognition:

Revenue is recognized to the extent that it can be reliably
measured and is probable that the economics benefit will
flow to the company. Revenue from sale of goods is
recognized when the significant risks & rewards of
ownership of the goods are transferred to the customers.

Events occurring after the date of balance sheet: -

Events occurring after the date of Balance Sheet are con¬
sidered up to the date of finalization of accounts wherever
material.

Foreign Exchange Transactions:

Foreign currency transactions are recorded in the books
by applying the exchange rate as on the date of
transaction. Exchange differences arising due to the
differences in the exchange rate between the transaction
date and the date of settlement of any monetary items are
taken to the Profit and Loss Account.

Remaining monetary assets and liabilities related to
foreign currency transactions remaining unsettled at the
end of the year are translated at the year-end exchange
rate and the exchange losses/gains arises there from are
adjusted to the Profit & Loss Account.

Borrowing Cost

Borrowing costs that are directly attributable to the
acquisition of a qualifying asset is capitalized as part of
the cost of the asset.

Taxes on Income: -

Taxes on income for the current period are determined on
the basis of taxable income under The Income Tax Act
1961.

Deferred tax is recognized subject to the consideration of
prudence, on timing differences between the accounting
income and taxable income for the year and quantified

using the tax rates and law enacted or substantively
enacted on balance sheet date.

Employee benefit expenses:

(i) The employees of the Company are entitled to receive
benefits with respect to Provident Fund, a defined
contribution plan in which both the Company and the
employee contribute monthly at a determined rate.

(ii) Gratuity, a defined benefit plan is accounted for on the
basis of an actuarial valuation as at the Balance Sheet
date.

(iii) Leave encashment benefits payable to employees are
non-accumulating and are accounted on the basis of
estimates as per company’s policy.

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Mar 31, 2024

NOTE - I - SIGNIFICANT ACCOUNTING POLICIES & ADDITIONAL INFORMATION

(a) Corporate Information:

INFLAME APPLIANCES LTD. (referred to as the ‘Company’) the primary business is manufacturing LPG Stove/cooktops/Chimney and sheet metal components.

(b) Basis of preparation of financial statements:

The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared theses financial statements to comply in all material respects with the accounting standards notified section 133 of the Companies Act, 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014, the relevant provisions of Companies Act, 2013 (to the extent notified) and pronouncements of ICAI, as applicable. The financial statements have been prepared on an accrual basis and under the historical cost convention.

(c) Summary of significant accounting policies:

I. Use of estimates:

The preparation of financial statements has been made in conformity with generally accepted accounting principles (GAAP), which requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the periods in which the results are known/materialize.

II. Fixed assets

(i) Property Plant & Equipment

Property plant & equipment are stated at cost of acquisition less accumulated depreciation and impairment loss if any. Cost of acquisition is inclusive of inward freight, insurance, duties, levies and taxes and incidental expenses related to acquisition of such assets; Subsidy received against a specific asset has been reduced from the cost of the said asset

III. Intangible Assets:

- Intangible Assets are capitalized at cost if: -

(a) It is probable that the future economic benefits that are attributable to the asset will flow to the company, &

(b) The company will have control over the assets &

(c) The cost of these assets can be measured reliably & is more than Rs. 10000/-. Intangible assets are amortized over their estimated useful life not exceeding 3 years on straight line pro-rata monthly basis.

IV. Depreciation:

- Depreciation on tangible fixed assets has been provided on the basis of “Written Down Value Method" at the rates specified in Schedule II of the Companies Act, 2013. The deprecation amount of an asset is the cost of asset less residual value. The residual value has been taken at 5% of the original cost.

- Depreciation on addition to/deductions from tangible assets during the year is charged on pro-rata basis from/up to the date on which asset is available for use/disposal.

- Assets valuing Rs. 5000/- or less are fully depreciated during the year in which asset is made available for use

V. Investments: -

- Investments are stated at cost. Income from Investments is recognized in the year, in which it is accrued.

VI. Inventories:

The basis of valuation of various categories of inventories are as

Raw Material : At cost of purchases (Indigenous/Imported)

Consumables & Spares : At cost of purchase

Stock in Process : At material cost & cost of conversion

Finished goods : Cost or net realizable value whichever is less

VII. Revenue recognition:

Revenue is recognized to the extent that it can be reliably measured and is probable that the economics benefit will flow to the company. Revenue from sale of goods is recognized when the significant risks & rewards of ownership of the goods are transferred to the customers.

VIII. Events occurring after the date of balance sheet:

Events occurring after the date of Balance Sheet are considered up to the date of finalization of accounts wherever material.

IX. Foreign Exchange Transactions:

Foreign currency transactions are recorded in the books by applying the exchange rate as on the date of transaction. Exchange differences arising due to the differences in the exchange rate between the transaction date and the date of settlement of any monetary items are taken to the Profit and Loss Account.

Remaining monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the year-end exchange rate and the exchange losses/gains arises there from are adjusted to the Profit & Loss Account.

X. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition of a qualifying asset is capitalized as part of the cost of the asset.

XI. Taxes on Income:

Taxes on income for the current period are determined on the basis of taxable income under The Income Tax Act 1961.

Deferred tax is recognized subject to the consideration of prudence, on timing differences between the accounting income and taxable income for the year and quantified using the tax rates and law enacted or substantively enacted on balance sheet date.

XII. Employee benefit expenses:

(i) The employees of the Company are entitled to receive benefits with respect to Provident Fund, a defined contribution plan in which both the Company and the employee contribute monthly at a determined rate.

(ii) Gratuity, a defined benefit plan is accounted for on the basis of an actuarial valuation as at the Balance Sheet date.

(iii) Leave encashment benefits payable to employees are non-accumulating and are accounted on the basis of estimates as per company’s policy.

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Mar 31, 2018

(i) Basis for Preparation of Financial Statements:

The Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP") to comply with the Accounting standards specified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions of the Companies Act 2013 and other accounting pronouncements of the Institute of Chartered Accountants of India. The financial statements have been prepared under historical cost convention and on accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year except for change in the accounting policy for depreciation on fixed assets as mentioned in Note 29.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

(iii) Revenue Recognition:

All revenue and expenses are accounted for on accrual basis. Revenue is recognized when no significant uncertainties exist in relation to the amount of eventual receipt.

a) Sales are recognized on dispatch of goods to customers and are inclusive of central / state excise duty.

b) Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

(iv) Inventories:

Inventories are stated at the lower of cost and net realizable value. Cost is determined on the basis of First In First Out (FIFO) method.

a) Raw materials Packing Material Stores & Components and Work-in-Process are valued at material cost.

b) Finished goods are valued at manufacturing cost which comprise direct material direct labour other direct cost and other related manufacturing overheads.

c) Obsolete/ slow moving inventories are adequately provided for.

(v) Fixed Assets:

Fixed assets are stated at their original cost of acquisition /installation net of accumulated depreciation amortization and impairment losses.

a) Fixed assets are stated at their original cost of acquisition /installation net of accumulated depreciation amortization and impairment losses.

b) Capital work-in-progress is stated at the amount incurred up to the date of the Balance Sheet.

c) Expenditures incurred during construction / erection period on project under implementation are included under "Capital work-in-progress”. These expenses are appropriated to fixed assets on commencement of commercial production.

(vi) Depreciation:

a) Depreciation on tangible and Intangible fixed assets has been provided on the Written Down Value method as per the useful life prescribed in Schedule II to the Companies Act 2013 except in respect of the following categories of assets in whose case the life of the assets has been

b) assessed as under based on technical advice taking into account the nature of the asset the estimated usage of the asset the operating conditions of the asset past history of replacement anticipated technological changes etc.

c) Depreciation is provided on assets acquired during the year from the date on which assets were put to use.

(vii) Foreign Currency Transactions:

Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transaction and from the transaction of monetary assets and liabilities denominated is foreign currencies are recognized in the profit and loss account.

(viii) Provisions and Contingencies:

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure on contingent liability is made when there is a possible obligation or present obligation that probably will not require an out flow of resources or where reliable estimate of the amount of the obligation cannot be made. However contingent assets are neither provided for nor disclosed.

(ix) Employee Benefits Defined Contribution Plan:

Employee benefits in the form of contribution to Provident Fund managed by Government Authorities Employees State Insurance Corporation and Labour Welfare Fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. The same is charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.

(x) Taxation:

a) Provision for Income Tax is determined on the basis of the estimated taxable income and amount expected to be paid to the tax authorities in accordance with the Provisions of the Income Tax Act 1961.

b) Deferred Tax has not been recognized in respect of deferred tax assets as the Statement has been made in the mid of the year.

(xi) 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.

(xii) 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.