SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Corporate Information
Company is incorporated in May, 2011 by manufacturing business of Sahaj group of firms; company is engaged in the business of trading and manufacturing of various kinds of textiles fabric products under brand name "Sahaj" by selling at different state of Gujarat and Maharashtra as well as adjoining states. The Company has completed Initial Public Offering (IPO) of its Equity Shares and its equity shares got listed on SME platform of NSE Limited ("NSE Emerge") on 7th September, 2023.
1.1 Basis of preparation:
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements are prepared under the historical cost convention, on the basis of a going concern and as per applicable Indian Accounting Standards. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis (except as otherwise stated)
1.2 Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods.
1.3 Revenue recognition:
a) Income from sale of goods is recognized upon transfer of significant risk and rewards of ownership of the goods to the customer which generally coincides with delivery and acceptance of the goods sold. Sales are net of Sales Tax/ VAT, returns, rebates and discounts.
b) Interest income is recognized on accrual basis.
c) Claims which are not of material nature / Insurance Claim etc. are accounted for when no significant uncertainties are attached to their eventual receipt.
d) Dividend is accounted for when right to receive dividend is established.
1.4 Treatment of Expenses:
All expenses are accounted for on accrual basis.
1.5 Fixed Assets:
a) Fixed Assets are stated at historical cost, less depreciation. Costs of fixed assets include taxes, duties, freight and other expense incidental and related there to the construction, acquisition, and installation of respective assets.
b) Preoperative expenditure during construction period / trial run: Direct expenses as well as clearly identifiable indirect expenses incurred on the projects during the period of construction are capitalized along with the respective assets.
1.6 Depreciation / Amortization :
Depreciation on fixed assets has been provided on SLM method on pro rata basis over the useful life prescribed in schedule II to the Companies Act, 2013 after considering salvage value of five percent of original cost. The Company has considered useful life of assets same as prescribed under the Companies Act, 2013.
1.7 Research and Development Expenditure:
There is no research and development expenditure made by company during the year.
1.8 Investments:
a) Long Term Investments are stated at cost. In case there is a diminution of permanent nature in value of Investments, the same is provided for.
b) (i) Quoted current investments are stated at the lower of cost and market value.
(ii) Unquoted current investments are stated at the lower of cost and fair value where available.
1.9 Inventories:
a) Stock of raw material is carried at cost.
b) Stock of work-in-progress is value at cost up to the level of processed and includes cost of material consumed, labour and manufacturing overhead.
c) Finished goods are value at cost of manufacturing or net realizable value, whichever is lower.
d) Consumable stores and spares are valued at lower of cost or net realizable value, as estimated by the management.
e) Obsolete, defective, unserviceable and slow / non-moving stocks are duly provided for.
1.10 Transactions in Foreign Currencies:
There is no foreign currencies transaction made during the year
1.11 Employee Benefits
Provident Fund and Employee State Insurance
The Company’s Contribution to the recognized Provident Fund and Employees State Insurance paid/payable during the year, is debited to the Profit and Loss Account.
1.12 Taxes on Income:
a) Provision for current tax is made on the basis of relevant provisions of the Income Tax Act, 1961.
b) Deferred tax has been recognized, subject to the consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period.
1.13 Leases:
The Company has not taken any property on lease during the year.
1.14 Earnings per Share:
The basic Earnings per Share (EPS) is calculated by dividing the net profit after tax for the year by number of shares outstanding during the year.
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