Accounting Policies of Prospect Consumer Products Ltd. Company

Mar 31, 2025

1. SIGNIFICANT ACCOUNTING POLICIES:

i. Basis Of Preparation of financial statements:

The Financial Statements are prepared in accordance with Indian Generally Accepted Accounting
Principles (GAAP). Financial statements are based on historical costs. These costs are not adjusted to
reflect the impact of the changing value in the purchasing power of the money. The Company
generally follows the mercantile system of accounting and recognises income and expenditure on an
accrual basis except significant uncertainties. GAAP comprises mandatory accounting standards as
prescribed under section 133 of Companies Act, 2013 (''the Act'') read with Rule 7 of companies
(Accounts) Rule 2014, the provisions of the act (to the extent notified).

ii. Revenue recognition:

Revenue from sale of products is recognized as per the terms of sale as and when the risk and rewards
of ownership pass on to the buyer and there is no significant uncertainty regarding ultimate collection
of the same. Other incomes are recognized as per the principle of accrual.

Revenue from contracts with customers is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the consideration entitled in exchange for those
goods or services. The Company is generally the principal as it typically controls the goods or
services before transferring them to the customer. Generally, control is transferred upon shipment
of goods to the customer or when the goods is made available to the customer, provided transfer of
title to the customer occurs and the Company has not retained any significant risks of ownership
or future obligations with respect to the goods shipped.

iii. Segment Reporting:

The Company at present is engaged in the business of Processing and Trading of Cashews and allied
products but constitutes a single business segment. In view of above, primary and secondary reporting
disclosures for business/ geographical segment as envisaged in AS -17 are not applicable to the
Company.

iv. Use of estimates:

The preparation of financial statements in conformity with Indian Generally Accepted Accounting
Principles requires management to make estimates and assumptions that affect the reported amount of
assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Any revision in accounting estimates is recognised properly
in current and future periods.

v. Property Plant & Equipments

Property Plant & Equipment (PPE) are stated at their historical cost. Addition to PPE comprise of
its purchase and expenses attributable with the same including taxes. On disposal of the Property,
Plant and Equipment, the difference between the carrying amount and its sale proceeds is
recognized in the Statement of Profit and Loss as “Profit/Loss on sale of PPE”.

a) Depreciation:

Company provides for depreciation on the Property Plant and Equipments as per written down
value method based on the estimated useful life of the assets as specified under Schedule II of
the Companies Act, 2013. Depreciation for assets purchased/sold during the year is
proportionately charged.

b) Intangible Assets:

An intangible asset is recognized if it is probable that the expected future economic benefits that are
attributable to the asset will flow to the Company and its cost can be measured reliably. Intangible
assets having finite useful lives are amortized on a straight-line basis over their estimated useful
lives. Intangible assets are stated at their cost of acquisition less accumulated amortization.

vi. Taxation:

Current income tax expense comprises taxes on income from operations in India only. Income tax
payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.
Advance income tax and provision for current income tax are presented in the balance sheet after
off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and
when the Company intends to settle the asset and liability on a net basis.

Deferred tax expense or benefit is recognized on timing differences being the difference 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 and liabilities are measured using the tax
rates and tax laws that have been enacted or substantively enacted by the balance sheet date. In
the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are
recognized only to the extent that there is virtual certainty that sufficient future taxable income
will be available to realize such assets. In other situations, deferred tax assets are recognized only
to the extent that there is reasonable certainty that sufficient future taxable income will be
available to realize these assets. The Company offsets deferred tax assets and deferred tax

liabilities if it has a legally enforceable right, and these relate to taxes on income levied by the
same governing taxation laws.

vii. Cash & Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into
cash and have maturities of three months or less from the reporting date, to be cash equivalents.
Financial instruments which have maturities of twelve months or less from the reporting date are
considered to be a part of current assets. All other financial instruments except the above are
considered to be a part of non-current assets.

viii. Earnings Per Share:

The Earning Per Share (EPS) is calculated after dividing the Profit After Tax attributable to
Equity Shareholders by the weighted average number of Equity Shares outstanding during the year
as per the principles laid down in Accounting Standard-20-Earning Per Share.

ix. Inventories:

The inventories comprise of Raw Materials and Finished Goods. They are valued as under.

a) Raw Materials & Packing Materials: At cost on FIFO basis or Net Realizable Value
whichever is lower.

b) Finished Goods: At cost or Net Realizable Value whichever is lower.

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Mar 31, 2024

CORPORATE INFORMATION:

PROSPECT COMMODITIES LTD. is a SME Listed Company incorporated under the Companies Act, 2013. The company is engaged in the business of trading and processing of cashew nuts and allied products.

1. SIGNIFICANT ACCOUNTING POLICIES:i. Basis Of Preparation of financial statements:

The Financial Statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP). Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of the money. The Company generally follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except significant uncertainties. GAAP comprises mandatory accounting standards as prescribed under section 133 of Companies Act, 2013 (''the Act'') read with Rule 7 of companies (Accounts) Rule 2014, the provisions of the act (to the extent notified).

ii. Revenue recognition:

Revenue from sale of products is recognized as per the terms of sale as and when the risk and rewards of ownership pass on to the buyer and there is no significant uncertainty regarding ultimate collection of the same. Other incomes are recognized as per the principle of accrual.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.

iii. Segment Reporting:

The Company at present is engaged in the business of Processing and Trading of Cashews, but constitutes a single business segment. In view of above, primary and secondary reporting disclosures for business/ geographical segment as envisaged in AS -17 are not applicable to the Company.

iv. Use of estimates:

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision in accounting estimates is recognised properly in current and future periods.

v. Property Plant & Equipments

Property Plant & Equipment (PPE) are stated at their historical cost. Addition to PPE comprise of its purchase and expenses attributable with the same including taxes. On disposal of the Property, Plant and Equipment, the difference between the carrying amount and its sale proceeds is recognized in the Statement of Profit and Loss as “Profit/Loss on sale of PPE”.

a) Depreciation:

Company provides for depreciation on the Property Plant and Equipments as per written down value method based on the estimated useful life of the assets as specified under Schedule II of the Companies Act, 2013. Depreciation for assets purchased/sold during the year is proportionately charged.

b) Intangible Assets:

An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably. Intangible assets having finite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets are stated at their cost of acquisition less accumulated amortization.

vi. Taxation:

Current income tax expense comprises taxes on income from operations in India only. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Advance income tax and provision for current income tax are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and when the Company intends to settle the asset and liability on a net basis.

Deferred tax expense or benefit is recognized on timing differences being the difference 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 and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right, and these relate to taxes on income levied by the same governing taxation laws.

vii. Cash & Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have maturities of three months or less from the reporting date, to be cash equivalents. Financial instruments which have maturities of twelve months or less from the reporting date are considered to be a part of current assets. All other financial instruments except the above are considered to be a part of non-current assets.

viii. Earning Per Share:

The Earning Per Share (EPS) is calculated after dividing the Profit After Tax attributable to Equity Shareholders by the weighted average number of Equity Shares outstanding during the year as per the principles laid down in Accounting Standard-20-Earning Per Share.

ix. Inventories:

The inventories comprise of Raw Materials and Finished Goods. They are valued as under.

a) Raw Materials & Packing Materials: At cost on FIFO basis or Net Realizable Value whichever is lower.

b) Finished Goods: At cost or Net Realizable Value whichever is lower.

x. Provisions And Contingent Liabilities:

A provision is recognized when the company has a present obligation as a result of past events and it is probable that the outflow of resources embodying economic benefits will occur to settle that obligation. The company recognizes the provision on the basis of best available estimates. These estimates are reviewed at each reporting date to reflect the current situation. Contingent Liabilities and Contingent Assets are neither recognized nor disclosed in the financial statements but are shown by way of a note to the Financial Statements.

xi. Business Purchase:

Business Purchase transactions are accounted for using the purchase (acquisition) method. The assets and liabilities acquired are incorporated in the financial statements at their existing carrying amount and the consideration has been paid by issue of fully paid equity shares at face value. Transaction costs incurred in connection with a business acquisition are expensed as incurred. Any excess of the amount of the consideration over the value of the net assets of the firm acquired by us is recognized in our company''s financial statements as goodwill arising on Business Purchase. The goodwill shall be amortized to income on a systematic basis over its useful life of five years.

xii. Borrowing Cost:

Borrowing cost directly attributable to the acquisition, construction of qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of cost of asset. The borrowing costs includes interest and transaction cost that the company incurs in connection with the borrowing of the funds. Other interest and borrowing costs are charged to Statement of Profit and Loss.

xiii. Employee Benefit Expenses:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered. Company does not make any contributions to any Provident Fund, State Insurance plan or Gratuity plan since those laws are not applicable to the company at present.

xiv. Cash flow Statement:

Cash Flow statement is prepared by Indirect method as per AS 3.

xv. Impairment of Assets:

At each balance sheet date, the company reviews the carrying of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. An impairment loss is charged to Profit and loss account in the year which an asset is identified as impaired.

xvi. Prior period comparatives:

Previous year''s figures have been regrouped / reclassified where necessary, to confirm to current year''s classification.

xvii. Foreign Currency Transactions:

(i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(ii) Monetary items denominated in foreign currencies at the period/year-end are restated at period/year-end rates.

(iii) Any income or expenses on account of exchange difference either on settlement or on translation is

recognized in the Statement of Profit and Loss.

(iv) Premium or discount on forward contracts for hedging foreign currency transactions are amortized and recognized in the statement of profit and loss over the period of the contract.

xviii. Government Grants:

Grants and subsidy from the government are recognized when there is reasonable assurance that the grant/subsidy will be received, and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is netted off from the respective expenses necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grants or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

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Mar 31, 2023

1. SIGNIFICANT ACCOUNTING POLICIES CORPORATE INFORMATION:

PROSPECT COMMODITIES LTD. is a SME Listed Company incorporated under the Companies Act, 2013. The company is engaged in the business of trading and processing of cashew nuts and allied products.

i. Basis Of Preparation:

The Financial Statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP). Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of the money. The Company generally follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except significant uncertainties. GAAP comprises mandatory accounting standards as prescribed under section 133 of Companies Act, 2013 (''the Act'') read with Rule 7 of companies (Accounts) Rule 2014, the provisions of the act (to the extent notified).

ii. Revenue recognition :

Revenue from sale of products is recognized as per the terms of sale as and when the risk and rewards of ownership pass on to the buyer and there is no significant uncertainty regarding ultimate collection of the same. Other incomes are recognized as per the principle of accrual.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.

iii. Segment Reporting :

The Company at present is engaged in the business of Processing and T rading of Cashews, but constitutes a single business segment. In view of above, primary and secondary reporting disclosures for business/ geographical segment as envisaged in AS -17 are not applicable to the Company.

iv. Use of estimates :

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision in accounting estimates is recognised properly in current and future periods

v. Property Plant & Equipments and Intangible Assets :

Property Plant & Equipment (PPE) are stated at their historical cost. Addition to PPE comprise of its purchase and expenses attributable with the same including taxes. Depreciation is provided on written down value basis, and as prescribed in schedule II of the companies Act, 2013. On disposal of the Property, Plant and Equipment, the difference between the carrying amount and its sale proceeds is recognized in the Statement of Profit and Loss as "Profit/Loss on sale of PPE”.

Intangible assets are stated at their cost of acquisition less accumulated amortisation .

vi. Taxation:

Current income tax expense comprises taxes on income from operations in India only. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Advance income tax and provision for current income tax are presented in the balance sheet after off-setting advance tax paid and income tax provisionarising in the same tax jurisdiction and when the Company intends to settle the asset andliability on a net basis.

Deferred tax expense or benefit is recognized on timing differences being the difference 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 and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governingtaxation laws.

vii. Cash & Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have maturities of three months or less from the reporting date, to be cash equivalents. Financial instruments which are having maturities of twelve months or less from the reporting date are considered to be a part of current assets. All other financial instruments except the above are considered to be a part of non-current assets.

viii. Earning Per Share:

The Earning Per Share (EPS) is calculated after dividing the Profit After T ax attributable to Equity Shareholders by the weighted average number of Equity Shares outstanding during the year as per the principles laid down in Accounting Standard-20-Earning Per Share.

ix. Inventories:

The inventories comprise of Raw Materials and Finished Goods. They are valued as under.

a) Raw Materials & Packing Materials: At cost on FIFO basis or Net Realizable Value whichever is lower.

b) Finished Goods: At cost or Net Realizable Value whichever is lower.