Accounting Policies of Signoria Creation Ltd. Company

Mar 31, 2025

1. Corporate Information

The Company was originally formed & incorporated as a private limited company in the state of Rajasthan under the companies Act 2013 under the name and style of “Signoria Creation Private Limited” vide certificate of incorporation dated September 30th, 2019 bearing Corporate Identity Number U18209RJ2019PTC066461 issued by the Registrar of Companies, Jaipur Rajasthan.

Subsequently, company was converted into Public Limited Company vide special resolution passed by shareholders at the Extra Ordinary General Meeting held on 28th July,2023 and the name of the company was changed to "Signoria Creation Limited” pursuant to issuance of Fresh Certificate of Incorporation dated August 17th, 2023 Registrar of Companies, Jaipur Rajasthan. The company Listed at NSE through SME IPO of 1428000 Shares at issue price of Rs 65 Per share having FV of Rs 10 Per Share on 19.03.2024. The CIN of Company after Listed on NSE is L18209RJ2019PLC066461 The Company is mainly engaged in manufacturing of textiles items and others relevant activities.

2. Significant Accounting Policies:

2.1 Basis of preparation

The standalone financial statements of the Company 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, of the Companies (Accounts) Rules, 2021 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable thereafter and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) regulations 2009, as amended (the "Regulations"). The standalone financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistently applied.

As the year - end figures are taken from the source and rounded to the nearest digits, the figures reported for the previous quarters might not always add up to the year-end figures reported in this statement.

2.2 Use of estimates

The preparation of Standalone financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported accounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period.

The estimates and assumptions used in the accompanying standalone financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any differences of actual to such estimates are prospectively made.

2.3 Presentation and disclosure of financial statements (AS-1)

There is no change in significant accounting policies adopted by the Company. Other disclosures which are necessary to be separately disclose are disclosed below in relevant reference paragraphs.

2.4 Valuation of Inventories (AS-2)

Finished Goods

Inventories of Finished goods are valued at lower of cost and net realizable value. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost formula used is FIFO.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.

Raw-material

Inventories of Raw-material and consumables are valued at cost.

Work-in-progress

Work-in-progress is the total cost of all unfinished goods in process. It’s every cost associated with every stage of production, including raw materials, overheads and labour costs directly attributed.

2.5 Cash Flow Statements (AS-3) & Sec.2 (40) of Companies Act, 2013

As per the Companies Act, 2013 there is requirement of preparing the Cash Flow Statement as the Company does not falls under the definition of Small Company as per Sec.2 (85) of the Companies Act, 2013.

Cash and Cash Equivalents-

Cash and Cash equivalents comprise cash and cash on deposits with bank and corporations. The company considers all highly liquid investments with the remaining maturity at the date of purchase of 3 months or less and that are readily convertible to know amount of cash to be cash equivalents.

Statement of cash flows

Cash flows are reported using the indirect method, where by profit/ loss before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts and payments. Cash flow for the year are classified by operating, investing and financial activities.

2.6 Contingencies and Event occurring after the Balance Sheet Date (AS-4)

Where events occurring after the balance sheet date provide evidence of condition that existed at the end of reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance sheet date of material size of nature are only disclosed.

2.7 Net Profit or Loss for the period, Prior Period Items and changes in the Accounting Policies (AS-5)

There are no extraordinary items or Prior Period Item in the Profit & Loss account and also there is no change in the accounting policy, hence this AS is not applicable on the Company.

2.8 Revenue Recognition (AS-9)

Sale of Goods

Revenue from sale of goods is recognized when significant risk and reward of ownership of the goods have been passed to the buyer and it is reasonable to expect ultimate collection. Sale of goods is recognized net of discount and othey taxes as the same is recovered from customers and passed on to the govern men tA0\/

Interest

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

Other Income

Other items of income and expenditure are recognized on accrual basis and as a going concern the accounting policies are consistent with the generally accepted accounting policies.

2.9 Property Plant & Equipment (AS-10)

Tangible Assets

The tangible items of property, plant and equipment are carried at cost less accumulated depreciation, using the cost model as prescribed under accounting Standards AS-10 “Property, Plant & Equipment”. Cost of an item of Property, plant and equipment comprises of the purchase price, including import duties, if any, non-refundable purchase taxes, after deducting trade discounts and rebated, and costs that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion. The cost comprises purchase price, borrowing costs and any cost directly attributable to bringing the asset to its working condition for the intended use.

Depreciation and Amortisation:

The company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Written Down Value (WDV) method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year.

Intangible assets are amortised as per the Written Down Value (WDV) method over the estimated useful life as specified in Schedule II of the Companies Act 2013. In respect of the assets sold during the year, amortization is provided from the beginning of the year till the date of its disposal.

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2.10 Employee Benefits (AS-15)

Short-term employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amounted in the statement of Profit and loss for the year which includes benefits like salary, wages, bonus and are recognized as expenses in the period in which the employee renders the related service.

Post-Employment benefits:

Defined Contribution Plan:

The Company has maintained Defined Contribution Plans for Post-employment benefits in the form of Provident Fund for all employees which are administered by Regional Provident Fund Commissioner. Provident Fund and Employee State Insurance are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company’s contributions to defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred,

2.11 Borrowing Cost (AS-16)

Borrowing costs are interest, commitment charges and other costs incurred by an enterprise in connection with Short Term/ Long-Term borrowing of funds. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, up to the date the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

Company has purchased a land at Plot No-Hl-74, RIICO Industrial Area, mansarovar Jaipur 302020 of Rs 6.5 crore on which factory building is constructed. The Construction of Building is Completed. The Put to use of Building is on 27-OCT-2024. Company has taken a term loan from HDFC therefore all borrowing cost i.e. Rs.37,42,465.70 (Processing Fees & Interest) of HDFC bank is capitalized under the head Building cost.

2.12 Segment Reporting (AS-17)

The company is engaged in manufacturing of ladies kurtis. Considering the nature of business and financial reporting of the company, the company is operating in only one segment. Hence segment reporting is not applicable

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Mar 31, 2024

2. Significant Accounting Policies:

2.1 Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian G^AP) to comply with the accounting standards specified under section 133 of the Companies Act, 2013, of the Companies (Accounts) Rules, 2021 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable thereafter and Securities,, and Exchange Board of India (Issue of Capital and Disclosure Requirements) regulations 2009, as amended (the "Regulations”). The standalone financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistently applied.

As the year - end figures are taken from the source and rounded to the nearest digits, the figures reported for the previous quarters might not always add up to the year-end figures reported in this statement.

2.2 Use of estimates

The preparation of Standalone financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported accounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period.

The estimates and assumptions used in the accompanying standalone financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial

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statements. Any differences of actual to such estimates are prospectively made.

2.3 Presentation and disclosure of financial statements (AS-1)

There is'' no change in significant accounting policies adopted by the Company. Other disclosures which are necessary to be separately disclose are disclosed below in relevant reference paragraphs.

2.4 Valuation of Inventories (AS-2)

Finished Goods

Inventories of Finished goods are valued at lower of cost and net realizable value. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost formula used is FIFO.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.

Raw-material

Inventories of Raw-material and consumables are valued at cost.

Work-in-progress

Work-in-progress is the total cost of all unfinished goods in process. It’s every cost associated with every stage of production, including raw materials, overheads and labour costs directly attributed.

2.5 Cash Flow Statements (AS-3) & Sec.2 (40) of Companies Act, 2013

As per the Companies Act, 2013 there is requirement of preparing the Cash Flow Statement as the Company does not falls under the definition of Small Company as per Sec.2 (85) of the Companies Act, 2013.

Cash and Cash Equivalents-

Cash and'' Cash equivalents comprise cash and cash on deposits with bank and corporations. The company considers all highly liquid investments with the remaining maturity at the date of purchase of 3 months or less and that are readily convertible to know amount of cash to be cash equivalents.

Statement of cash flows

Cash flows are reported using the indirect method, where by profit/ loss before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals'' of past or future cash receipts and payments. Cash flow for the year are classified by operating, investing and financial activities.

2.6 Contingencies and Event occurring after the Balance Sheet Date (AS-4)

Where events occurring after the balance sheet date provide evidence of condition that existed at the end of reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance sheet date of material size of nature are only disclosed.

2.7 Net Profit or Loss for the period, Prior Period Items and changes in the Accounting Policies (AS-5)

There are no extraordinary items or Prior Period Item in the Profit & Loss account and also there is no change in the accounting policy, hence this AS is not applicable on the Company.

2.8 Revenue Recognition (AS-9)

Sale of Goods

Revenue from sale of goods is recognized when significant risk and reward of ownership of the goods have been passed to the buyer and it is reasonable to expect ultimate collection. Sale of goods is recognized net of discount and other taxes as the same is recovered from customers and passed on to the government. Interest

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

Other Income

Other items of income and expenditure are recognized on accrual basis and as a going concern the accounting policies are consistent with the generally accepted accounting policies.

2.9 Property Plant & Equipment (AS-10)

Tangible Assets

The tangible items of property, plant and equipment arc carried at cost less accumulated depreciation, using the cost model as prescribed under accounting Standards AS-10 “Property, Plant 8s Equipment”. Cost of an item of Property, plant and equipment comprises of the purchase price, including import duties, if any, non-refundable purchase taxes, after deducting trade discounts and rebated, and costs that arc directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, .

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion. The cost comprises purchase price, borrowing costs and any cost directly attributable to bringing the asset to its working condition for the intended use.

Depreciation and Amortisation:

The company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Written Down Value (WDV) method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year.

Intangible assets are amortised as per the Written Down Value (WDV) method over the estimated useful life as specified in Schedule II of the Companies Act 2013. In respect of the assets sold during the year, amortization is provided from the beginning of the year till the date of its disposal.

. 2.10 Employee Benefits (AS-IS)

Short-term employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amounted in the statement of Profit and loss for the year which includes benefits like salary, wages, bonus and are recognized as expenses in the period in which the employee Tenders the related service.

Post-Employment benefits:

Defined Contribution Plan:

The Company has maintained Defined Contribution Plans for Post-employment benefits in the form of Provident Fund for all employees which are administered by Regional Provident Fund Commissioner. Provident Fund and Employee State Insurance are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company’s contributions to defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

[Defined benefit Plans:

Since the company is incorporated on 30-09-2019 which is less than 5 years. Moreover there is no employee in the company whose tenure exceeds 1 year. Therefore provision for Payment of gratuity Act is not applicable to the company.

2.11 Borrowing Cost (AS-16)

Borrowing costs -are interest, commitment charges and other costs incurred by an enterprise in connection with Short Term/ Long-Term borrowing of funds. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, up to the date the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and''Loss in the year in which they are incurred.

Company has purchased a land at Plot No-Hl-74, RIICO Industrial Area, mansarovar Jaipur 302020 of Rs 6.5 crore on which factory building is under construction, company has taken a term loan from HDF.C therefore all borrowing cost i.e. Rs.76,90,385.17 (Processing Fees & Interest) of HDFC bank is capitalized under the head land and building cost.

2.12 Segment Reporting (AS-17)

The company is engaged in manufacturing of ladies kurtis. Considering the nature of business and financial reporting of the company, the company is operating in only one segment. Hence segment reporting is not applicable

2.13 Related Party Disclosures (AS-18)

As per Accounting Standard 18, the disclosures of transaction with the related Parties Arc Given Below: -

2.14 Earning Per Share (AS-20)

The earnings in ascertaining the Company''s EPS comprises the net profit after tax attributable to equity shareholders and includes the post-tax effect of any extraordinary items. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(loss) after tax attributable to Equity Shareholders (including the post-tax -effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from

continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

2.15 Taxes on income (AS-22)

. Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates & tax laws. Deferred tax is recognized in respect of timing differences between taxable income and accounting income i.e. differences that originates in one period and are capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates and tax laws that have been enacted or subsequently enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets are reviewed as at each balance sheet date and written -up or written down to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realized.

Minimum Alternative Tax (‘MAT’) under the provisions of the Income-tax Act, 1961 is recognized as current tax in the Statement of Profit & Loss. The credit available under the Act in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.