Accounting Policies of Saraswati Saree Depot Ltd. Company

Mar 31, 2025

A. SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis for preparation of accounts

The accounts have been prepared in accordance with IND AS and Disclosures thereon comply with
requirements of IND AS, stipulations contained in Schedule- MI-Division II (revised) as applicable under
Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014,
Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, other
pronouncements of ICAI, provisions of the Companies Act. Assets and liabilities have been classified as
current or non-current as per the Company''s normal operating cycle and other criteria set out in
revised Schedule - III to the Companies Act, 2013.

1.2 Use of Estimates

IND AS enjoins management to make estimates and assumptions related to financial statements that
affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to
the year. Actual result may differ from such estimates. Any revision in accounting estimates is
recognized prospectively in the period of change and material revision, including its impact on financial
statements, is reported in the notes to accounts in the year of incorporation of revision.

1.3 Recognition of Income and Expenses

i. Revenue from sale contracts with customers is recognized 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 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 are 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 transported.

ii. Interest Income is recognized on time proportion basis taking into account the amount outstanding
and the rate applicable.

iii. Other incomes have been recognized on accrual basis in financial statements.

1.4 Property, Plants and Equipment

The tangible assets are held for use in supply of goods or services or for administrative purposes. These
are recognized and carried under cost model i.e. cost less accumulated depreciation and impairment
loss, if any which is akin to recognition criteria under erstwhile GAAP.

i. Cost includes freight, duties, taxes and other expenses directly incidental to acquisition, bringing the
asset to the location and installation including site restoration up to the time when the asset is ready

for intended use. Such Costs also include Borrowing Cost if the recognition criteria are met.

ii. When a major inspection/repair occurs, its cost is recognized in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are satisfied. Any remaining carrying amount
of the cost of previous inspection/repair is derecognized.

iii. Depreciation has been provided on written down value method in terms of expected life span of
assets as referred to in Schedule II of the Companies Act, 2013.

iv. Components relevant to fixed assets, where significant are separately depreciated on written down
value basis in terms of their life span assessed by technical evaluation in specific context.

v. On sales of fixed assets any profit earned/loss sustained towards excess/shortfall of sale value Vis-a¬
vis carrying cost of assets is accounted for in statement of profit and loss.

1.5 Impairment of Non-Financial Assets

i. The Company assesses at each reporting date as to whether there is any indication that any Property
Plant and Equipment and Intangible Assets or group of Assets, called Cash Generating Units (CGU)
may be impaired. If any such indication exists, the recoverable amount of an asset or CGU is
estimated to determine the extent of impairment, if any. When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the
CGU to which the asset belongs.

ii. An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying
amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value
less cost of disposal and value in use. Value in use is based on the estimated future cash flows,
discounted to their present value using pre-tax discount rate that reflects current market
assessments of the time value of money and risk specific to the assets.

iii. The impairment loss recognised in prior accounting period is reversed if there has been a change in
the estimate of recoverable amount.

1.6 Financial Instruments

i. Financial Assets

Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded

at fair value through profit or loss, transaction costs that are attributable to the acquisition of the

financial asset.

Subsequent Measurement

For purpose of subsequent measurement, financial assets are classified in two broad categories:

- Financial Assets at fair value

- Financial Assets at amortized cost

Where assets are measured at fair value, gains and losses are either recognized entirely in the

statement of profit and loss, or recognized in other comprehensive income.

A financial asset that meets the following two conditions is measured at amortized cost.

- Business Model Test: The objective of Company''s business model is to hold the financial asset to
collect the contractual cash flows.

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payment of principal and interest on the principal amount
outstanding.

A financial asset that meets the following two conditions is measured at fair value through OCI: -

- Business Model Test: The financial asset is held within a business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets.

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payment of principal and interest on the principal amount outstanding.

All other financial assets are measured at fair value through profit and loss.

All equity investments are measured at fair value in the balance sheet, with value changes recognized in
the statement of profit and loss, except for those equity investments for which the entity has elected
irrevocable option to present value changes in OCI.

Impairment of Financial Assets

The Company assesses impairment based on expected credit losses (ECL) model at an amount equal to:

- 12 months expected credit losses, or

- Lifetime expected credit losses

Depending upon whether there has been a significant increase in credit risk since initial recognition.

However, for trade receivables, the Company does not track the changes in credit risk. Rather, it
recognizes impairment loss allowances based on lifetime ECLs at each reporting date, right from its
initial recognition.

ii. Financial Liabilities

All financial liabilities are initially recognized at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

Financial liabilities are classified as measured at amortized cost or Fair Value Through Profit and Loss
(FVTPL). A financial liability is classified as FVTPL if it is classified as held for trading, or it is a derivative or
is designated as such on initial recognition. Financial Liabilities at FVTPL are measured at fair value and
net gains or losses, including any interest expense, are recognized in statement of profit and loss. Other
financial liabilities are subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in statement of profit and loss.
Any gain or loss on de-recognition is also recognized in statement of profit and loss.

Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place
either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

- Level 1 - Quoted (unadjusted) market prices in active markets for identified assets or liabilities

- Level 2 - Valuation techniques for which the lowest level of input that is significant to the fair value
measurement is directly or indirectly observable

- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.

1.8 Inventories

Inventories are valued at the lower of cost or net realizable value. Cost includes purchase price, duties,
transport & handing costs and other costs directly attributable to the acquisition and bringing the
inventories to their present location and condition.

The cost in respect of trading goods and packing material is determined under the First In First Out
method.

1.9 Employee Benefits

i. Short term employee benefits

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period are recognized in respect of employees'' services
up to the end of the reporting period and are measured at the amounts expected to be incurred
when the liabilities are settled. The liabilities are presented as current employee benefit obligations
in the balance sheet.

ii. Long term/Post Separation employee benefit plan

> Defined Contribution Plan:

The Company''s contributions to recognized Provident Fund and Labour Welfare Fund are
charged to profit and loss account on accrual basis.

> Defined Benefit Plan:

The Company has made necessary provisions in the accounts in line with the requirement of
AS-15.

1.10 Income Tax and Deferred Tax

The liability of Company on account of Income Tax is computed considering the provisions of the
Income Tax Act, 1961.

Deferred tax is provided using balance sheet approach on temporary differences at the reporting date
as difference between the tax base and the carrying amount of assets and liabilities. Deferred tax is
recognized subject to the probability that taxable profit will be available against which the temporary
differences can be reversed.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized 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 relating to items recognized
outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in
equity).

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.