Accounting Policies of Shanthala FMCG Products Ltd. Company

Mar 31, 2025

1 General Information:

SHANTHALA FMCG PRODUCTS LIMITED (Formerly
known as SHANTHALA FMCG PRODUCTS PRIVATE
LIMITED ) (the ''Company'') is a Public Limited Company,
domiciled in India with its registered office located
at 7^th Block, Gandhinagar Bye Pass Road, Virajpet,
Kodagu - 571218. The Registration Number of the Company
is L51109KA2014PLC073756. The Company is a FMCG
product distributor for the large size FMCG Companies in
India. It distribute Branded packaged foods, Personal care
products, Education & Stationery products, Matches &
Agarbatti and tobacco products. Comany also distributors
for one of the largest FMCG MNC Company in India. We
distribute branded Beauty & wellbeing, Nutrition, Personal
care & Home care products for them. it also distribute Oil,
Sugar and Atta for M. K. Agrotech Pvt. Ltd. sold under their
brand name Sunpure.

2 Basis of Preparation:

The financial statements have been prepared under
historical cost conversion or accrual basis of accounting
and in accordance with generally accepted accounting
principles and the mandatory accounting standards issued
by ICAI. The accounting policies, in all material respects,
have been consistently applied, and or consistent with
this in the previous year. The estimates and Assumptions
used in the preparation of financial statements are based
upon management''s evaluation of the relevant facts and
circumstances as of the date of the financial statements,
which may differ from the actual results at a subsequent
date. Differences between the actual and estimates
are recognized in the period in which the results are
materialized

Use of estimates: The preparation of financial statements
requires the management to make judgments, estimates and
assumptions that effect the reported amounts of revenues,
expenses, assets and liabilities and disclosure of contingent
liabilities, at the end of the reporting period. Although these
estimates are based on the managements best knowledge
of correct events and actions, uncertainty about these
assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of
assets and liabilities in future periods.

Changes in Accepting Policy: There is no change in
accounting policy during the period

2 Method of Accounting:

The Books of Accounts are maintained using accrual basis
of accounting. The preparation of the financial statements
in conformity with GAAP requires Management to make
estimates and assumptions that affect the reported balances
of assets and liabilities and disclosure relating to contingent
liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period.
Examples of such estimates include provision for doubtful
debts, future obligations under employee retirement benefit
plans, income taxes and the useful lives of fixed assets and
intangible assets. Management believes that the estimates
used in the preparation of financial statements are prudent
and reasonable. Future results could differ from these
estimates.

3 Plant, Property and Equipment (PPE):

(i) PPE is recognised when it is probable that future
economic benefits associated with the item will flow to
the company and the cost of the item can be measured
reliably.

(ii) All PPEs are stated at original cost including non¬
refundable purchase taxes and any directly attributable
costs of bringing the assets to its working condition for
its intended use, net of tax/ duty credits availed, if any,
after deducting resale/ trade discount less accumulated
depreciation and accumulated impairment losses if any.
Gains and losses arising from disposal of assets are
recognised in statement of profit and loss in the year of
disposed. The assets is derecognised on disposal or no
economic benefit flow to the companies.

(iii) Subsequent costs are included in the assets carrying
amount or recognised as a separate assets as
appropriate, only when it is probable that future
economic benefits associated with them will flow to
the company and the cost of the item can be measured
reliably. All other repairs and maintenance are charged
to Statement of Profit and Loss during the period in
which they are incurred.

4 Deprecation:

Depreciation on PPE for the year have been provided on
written down value method prorate for the period of use,
as per the useful lives prescribed under schedule-II to the
companies Act, 2013.

5 Investments:

Long-term investments are valued at cost. Provision for
diminution, if any, in the value of investments is made
to recognize a decline, other than temporary Current
investments are stated at the lower of cost and fair value,
computed individually for each investment. In case of
investments in mutual funds which are unquoted, net assets
value is taken as fair value.

6 Bo rrowing Costs :

Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of
the cost of such assets

7 Preliminary Expenditures :

Preliminary expenditure has been w/off for five years

8 Inventories:

Valuation of Inventories: Inventories are valued at cost price
excluding GST. Company is having the policy that the GST
on purchase and sales are considered as non revenue item.
GST collected is set off against GST paid on purchase and the
difference is paid.

9 Revenue Recognition:

Revenue is recognized to the extent that it is probable that
the economic benefits will flow to the entity and the revenue
can be reliably measured. Interest income is recognized on
the time proportion basis taking into account the amount
outstanding and applicable interest rate. However the
management has relied on certificates and confirmations
issued by the depositee. All revenue from services
recognized which is relating to the period. The revenue is
recognized net of taxes carrying on such services.

10 Purchases:

Purchases are exclusive of GST Tax charged by the suppliers.
It also includes cost of Insurance, freight and octroi.

11 Sundry Debtors:

The sundry debtors are stated after writing off debts
considered as bad. Bad debts are written off during the
period in which they are identified.

12 Taxes on income:

Provision for current tax is made, based on the tax payable
under the Income Tax Act, 1961. Minimum Alternative Tax

(MAT) credit, which is equal to the excess of MAT (calculated
in accordance with provisions of section 115JB of the
Income tax Act, 1961) over normal income-tax is recognized
as an asset by crediting the Profit and Loss Account only
when and to the extent there is convincing evidence that the
Company will be able to avail the said credit against normal
tax payable during the period of ten succeeding assessment
year.

Deferred tax on timing differences between taxable income
and accounting income is accounted for, using the tax rates
and the tax laws enacted or substantially enacted as on the
balance sheet date. Deferred tax assets on unabsorbed tax
losses and unabsorbed tax depreciation are recognized only
when there is a virtual certainty of their realization. Other
deferred tax assets are recognized only when there is a
reasonable certainty of their realization.

13 Impairment:

The Company makes reasonable estimate of the carrying
value of tangible and intangible assets for any possible
impairment at each balance sheet date. An impairment loss
is recognized when the carrying amount of an asset exceeds
its recoverable amount. In assessing the recoverable
amount, the estimated future cash flows are discounted to
their present value at appropriate discount rates.

14 Earning Per Shares:

In accordance with Accounting Standard-20 "Earning per
Share" issued by the Institute of Chartered Accountants
of India, Basic earning per shares is computed by using
weighted average number of shares outstanding during the
year.

15 Borrowing Cost

Borrowing Cost directly attributable to the construction
of the qualifying assets are capitalised as part of the cost.
Interest paid accounted net of reimbursed

---

Mar 31, 2024

1 SIGNIFICANT ACCOUNTING POLICIES AND
NOTES TO ACCOUNTS

Significant Accounting Policies

1 Basis of Preparation:

The financial statements have been prepared under
historical cost conversion or accrual basis of accounting
and in accordance with generally accepted accounting
principles and the mandatory accounting standards issued
by ICAI. The accounting policies, in all material respects,
have been consistently applied, and or consistent with
this in the previous year. The estimates and Assumptions
used in the preparation of financial statements are based
upon management''s evaluation of the relevant facts and
circumstances as of the date of the financial statements,
which may differ from the actual results at a subsequent
date. Differences between the actual and estimates are
recognized in the period in which the results are materialized.

Use of estimates: The preparation of financial statements
requires the management to make judgments, estimates and
assumptions that effect the reported amounts of revenues,
expenses, assets and liabilities and disclosure of contingent
liabilities, at the end of the reporting period. Although these
estimates are based on the managements best knowledge
of correct events and actions, uncertainty about these
assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of
assets and liabilities in future periods.

Changes in Accepting Policy: There is no change in accounting
policy during the period.

2 Method of Accounting

The Books of Accounts are maintained using accrual basis
of accounting. The preparation of the financial statements
in conformity with GAAP requires Management to make
estimates and assumptions that affect the reported balances
of assets and liabilities and disclosure relating to contingent
liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period.
Examples of such estimates include provision for doubtful
debts, future obligations under employee retirement benefit
plans, income taxes and the useful lives of fixed assets and
intangible assets.

Management believes that the estimates used in the
preparation of financial statements are prudent and
reasonable. Future results could differ from these estimates.”

3 Plant, Property and Equipment (PPE)

(i) PPE is recognised when it is probable that future economic
benefits associated with the item will flow to the company
and the cost of the item can be measured reliably. (ii) All
PPEs are stated at original cost including non-refundable
purchase taxes and any directly attributable costs of bringing
the assets to its working condition for its intended use, net of
tax/ duty credits availed, if any, after deducting resale/ trade
discount less accumulated depreciation and accumulated
impairment losses if any. Gains and losses arising from
disposal of assets are recognised in statement of profit and
loss in the year of disposed. The assets is derecognised on
disposal or no economic benefit flow to the companies.
(iii) Subsequent costs are included in the assets carrying
amount or recognised as a separate assets as appropriate,
only when it is probable that future economic benefits
associated with them will flow to the Company and the cost
of the item can be measured reliably. All other repairs and
maintenance are charged to Statement of Profit and Loss
during the period in which they are incurred.

4 Depreciation :

Depreciation on PPE for the year have been provided on
written down value method prorate for the period of use,
as per the useful lives prescribed under Schedule-II to the
Companies Act, 2013.

5 Investments :

Long-term investments are valued at cost. Provision for
diminution, if any, in the value of investments is made
to recognize a decline, other than temporary. Current
investments are stated at the lower of cost and fair value,
computed individually for each investment. In case of
investments in mutual funds which are unquoted, net assets
value is taken as fair value.

6 Borrowing Costs :

Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of
the cost of such assets.

7 Preliminary Expenditures :

Preliminary expenditure has been w/off for five years

8 Inventories:

Valuation of Inventories: Inventories are valued at cost price
excluding GST. Company is having the policy that the GST
on purchase and sales are considered as non revenue item.
GST collected is set off against GST paid on purchase and the
difference is paid.

9 Revenue Recognition:

Revenue is recognized to the extent that it is probable that
the economic benefits will flow to the entity and the revenue
can be reliably measured. Interest income is recognized on
the time proportion basis taking into account the amount
outstanding and applicable interest rate. However the
management has relied on certificates and confirmations
issued by the depositee. All revenue from services recognized
which is relating to the period. The revenue is recognized net
of taxes carrying on such services.

10 Purchases:

Purchases are exclusive of GST Tax charged by the suppliers.
It also includes cost of Insurance, freight and octroi.

11 Sundry Debtors:

The sundry debtors are stated after writing off debts
considered as bad. Bad debts are written off during the
period in which they are identified.

12 Taxes on income:

Provision for current tax is made, based on the tax payable
under the Income Tax Act, 1961. Minimum Alternative Tax
(MAT) credit, which is equal to the excess of MAT (calculated
in accordance with provisions of section 115JB of the Income
tax Act, 1961) over normal income-tax is recognized as an
asset by crediting the Profit and Loss Account only when and
to the extent there is convincing evidence that the Company
will be able to avail the said credit against normal tax payable
during the period of ten succeeding assessment year.

Deferred tax on timing differences between taxable income
and accounting income is accounted for, using the tax rates

and the tax laws enacted or substantially enacted as on the
balance sheet date. Deferred tax assets on unabsorbed tax
losses and unabsorbed tax depreciation are recognized only
when there is a virtual certainty of their realization. Other
deferred tax assets are recognized only when there is a
reasonable certainty of their realization.

13 Impairment:

The Company makes reasonable estimate of the carrying
value of tangible and intangible assets for any possible
impairment at each balance sheet date. An impairment loss is
recognized when the carrying amount of an asset exceeds its
recoverable amount. In assessing the recoverable amount,
the estimated future cash flows are discounted to their
present value at appropriate discount rates.

14 Earning Per Shares:

In accordance with Accounting Standard-20 “Earning per
Share” issued by the Institute of Chartered Accountants of
India, Basic earning per shares is computed by using weighted
average number of shares outstanding during the year.

15 Borrowing Cost

Borrowing Cost directly attributable to the construction
of the qualifying assets are capitalised as part of the cost.
Interest paid accounted net of reimbursed.