Accounting Policies of Pattech Fitwell Tube Components Ltd. Company

Mar 31, 2025

Significant Accounting Policies and Notes Forming Part of
Accounts

A) Basis of Preparation of Financial Statements

The financial statements are prepared for the period from
01.04.2024 - 31.03.2025 under the Historical cost convention as
a going concern. The company follows the mercantile system of
accounting recognizing income and expenditure on accrual basis.
Accounting policies not referred to specifically are consistent with
Generally Accepted Accounting Principles and Accounting
Standards. The Company is Small and Medium Company (SMC)
based on the Companies (Accounting Standard) Rules, 2014
notified and accordingly the company has complied with all
Accounting Standards applicable to a SMC.

The Standalone Financial Statements have been presented in
Indian Rupees (INR), which is the Company''s functional currency.
All financial information presented in INR has been rounded off to
the nearest two decimals of hundreds.

These financial statements are approved for issue by the Board
of Directors on 29.05.2025.

B) Statement of compliance

Company has prepared its financial statements using the existing
standards in view of the guidelines that Companies whose
securities are listed on SME exchanges and MSME company,
(which does not meet the net worth criteria as prescribed) shall
not be required to apply Ind AS. And such companies shall
continue to comply with the existing Accounting Standards
prescribed in Annexure to the Companies (Accounting Standards)
Rules, 2006, unless they choose otherwise.

Accounting policies have been consistently applied except where
a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.

C) Use of estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period end. Although these
estimates are based upon management''s best knowledge of
current events and actions, actual results could differ from these
estimates.

D) Revenue Recognition

1. Sales are recognized, net of taxes, returns and trade discounts,
on transfer of significant risks and rewards of ownership to the
buyer, which generally coincides with the delivery of goods to
customers. Sales include delayed payment charges.

2. Revenue from services is recognised when the provision of
services is complete and there is either no unfulfilled obligations
on the Company or unfulfilled obligations are inconsequential or
perfunctory and will not affect the customer''s final acceptance of
the services.

3. Rent Income, Interest income and Other Income is recognised on
its accrual.

E) Property, plant and equipment

1. Tangible Fixed Assets such as Buildings, plant and machinery,
vehicles, furniture and office equipments are stated at cost less
accumulated depreciation. The cost of a property, plant and
equipment comprises its price at a value which have been
attributable to them on conversion of partnership firm in to a
company.

2. There are no Intangible Assets with the company.

F) Depreciation and Amortisation

Depreciation on property, plant and equipment is provided under
the written down value method over the useful lives of assets as
prescribed under Part C of Schedule II to the Companies Act,
2013.

G) Inventories

1) Inventories includes Raw materials, Work in process and the
finished goods etc. The same are valued at the lower of cost (on
FIFO basis) or the net realisable value. Cost includes all charges
in bringing the goods to the point of sale. Finished goods include
appropriate proportion of overheads.

H) Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of
qualifying assets are capitalized as a part of such assets. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. Other borrowing costs are recognised as
expense in the period in which they are incurred.

I) Provision of taxes on income

Tax expense comprises both current and deferred tax in accordance
with the requirements of Accounting Standard 22 - Accounting for
taxes on Income.

1. Current Tax

Current Tax is measured at the amount expected to be paid to the tax
authorities, using the tax rate and tax laws applicable for the year.

2. Deferred Tax

Deferred Tax is recognized on timing differences being the differences
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 are not recognized on unabsorbed depreciation
and carry forward of losses unless there is a virtual certainty supported
by convincing evidence that sufficient taxable profits will be available
against which such deferred assets can be realized.

J) Employee Benefits

As per the relevant Tax law, all the eligible employees must receive
benefits from a ESI, which is a defined contribution plan. Both the
employees and employer each should make monthly contributions to
the plan. We believe that the company will have no further obligations
under the plan beyond its monthly contributions, if paid correctly and
consistently. Contribution to the extent paid by the company are
charged to Profit and Loss account. The company does not have a
policy on payment of Gratuity and leave encashment for its employees.

K) Earnings Per Share

In determining the earnings per share, the Company considers the net
profit after tax before extraordinary item and after extraordinary items
and includes post - tax effect of any extraordinary items. The number
of shares used in computing the basic earnings per share is the
weighted average number of shares outstanding during the period. For
computing diluted earnings per share, potential equity shares are
added to the above weighted average number of shares.

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Mar 31, 2024

Note A

Primary Security:

Hypothecation of entire Raw materials Stock-ln-Process, Stores & Spares, Packing Materials, Finished Goods and Book-Debts of the company,

both present & future.

Hypothecation of Entire Plant & Machinery of the company.

Secondary - Equitable mortgage of the Industrial property at old bearing RS no.729,722,730, Block No 87318, paiki 2 admeasuring 8438 sq mts

Along with 2000 sq mts of construction situated at GETCO 66, KV Sub Station Por, Vadodara standing in the name of M/s Pattech Fitwell Tube

Components Limited.

Collateral Security:

1. Negative Lien of industrial property situated at old bearing RS no720,722,730, block No 8731 A, paiki 2 admeasuring 13597 sq mts And 3000 sq mts of constructed area at GETCO 66, KV Sub Station Por, Vadodara standing in the name of M/s Pattech Fitwell Tube Components Limited having boundaries.

2. Extension of residential Non-agricultural plot of land at Maule Kalali Vadodara lying behind land bearing Revenue Survey No 507, Block No 4161 Paft. Shivganga Co Operative Housing Society Limited Known as " KAf.lHA", Open Plot No 31, plot Area admeasuring 185 80 Sq mtrs, at Registration District & Sub District Vadodara.

3. Personal Guarantee of all the Directors and property owners. (Namely 1. Mr. Bharat Limbani, 2. Mr. Jaysukh Limbani 3. Mrs. Ripalben Limbani)

Defaults in repayment of Term Loans & Interest:

As appears, the company has not defaulted in payment of principal and interest of Term Loan with all the lenders during period April 1,2023 to

March 31,2024.

Disclosures under Micro, Small & Medium Enterprise Development Act, 2006

As informed to us. there are no Micro, Small and Medium Enterprises to whom amounts are outstanding for more than 45 days as at the year end. No supplier has intimated the company about its status as Micro or small Enterprises or its registration with the appropriate Authority under ‘The Micro, Small and Medium Enterprises Development Act, 2006.

Under the Micro, Small & Medium Enterprises Development Act, 2006 which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small & Medium Enterprises. The Company is in the process of compiling relevant information from its customers about their coverage under the said Act. Since the relevant information is not readily available, no disclosures have been made in the accounts.

26. Capital Commitments outstanding as on March 31,2024 is ? Nil (PY ? Nil) & Contingent Liabilities as on March 31,2024 is ? Nil (PY ? Nil).

27. The company''s primary business is that of manufacturing of all type of Pipe and Tube Fittings in C.S, A.S, and S.S like Elbow, Tee, Reducer, Cap, Spool, Stub End and Flanges etc and so on. There is only one segment hence, disclosure requirement of segment reporting is not applicable.

28. Balances of Sundry Creditors, Sundry debtors, Loans & advances, etc. are subject to confirmation and reconciliation, if any.

29. In the opinion of Board of Directors; Current Assets, Loans & Advances (Including Capital Advances) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated, Adequate Provisions have been made in the accounts for all the known liabilities.

30. Additional regulatory information required by Schedule III:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

iv) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the I ncome T ax Act, 1961.

v) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

vi) The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.

vii) The company does not have any transaction with companies which have been struck off in records of the Ministry of Corporate Affairs.

viii) Company has not revalued any of its Property, Plant & Equipment or intangible assets or both during the year.

31. Since the previous year period is for less than one year, the comparative figures are not strictly comparable.

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Mar 31, 2023

Background and Operations

Pattech Fitwell Tube Components Limited is a Public limited company incorporated on August 22, 2022 with Registrar of Companies vide Corporate Identification Number (CIN) U28990GJ2022PLC134839. having registered office at Survey No.873/B/1, RD No: 1, Ansons Limbani Estate Nr. GETCO 66K.V. Sub Station, G.I.D.C, Por, N.H-08 Vadodara Gujarat - 391243.

"Pattech Fitwell Tube Components, a partnership firm incorporated on 22/11/2012, was converted in to public Limited Company. The Company is a manufacture of all type of Pipe and Tube Fittings in C.S, A.S, and S.S like Elbow, Tee, Reducer, Cap, Spool, Stub End and Flanges etc and also engaged in to service activities.

Note No - 16Significant Accounting Policies and Notes Forming Part of AccountsA) Basis of Preparation of Financial Statements

The financial statements are prepared for the period from 22.08.2022 - 31.03.2023 under the Historical cost convention as a going concern. The company follows the mercantile system of accounting recognizing income and expenditure on accrual basis. The Company is Small and Medium Company (SMC) based on the Companies (Accounting Standard) Rules, 2014 notified and accordingly the company has complied with all Accounting Standards applicable to a SMC.

B) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

C) Revenue Recognition

1. Sales are recognized, net of taxes, returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include delayed payment charges

2. Revenue from services is recognised when the provision of services is complete and there is either no unfulfilled obligations on the Company or unfulfilled obligations are inconsequential or perfunctory and will not affect the customer''s final acceptance of the services.

3. Rent Income, Interest income and Other Income is recognised on its receipt.

D) Property, plant and equipment

1. Tangible Fixed Assets such as Buildings, plant and machinery, vehicles, furniture and office equipments are stated at cost less accumulated depreciation. The cost of a property, plant and

equipment comprises its price at a value which have been attributable to them on conversion of partnership firm in to a company.

2. There are no Intangible Assets with the company.

E) Depreciation and Amortisation

1)Depreciation on property, plant and equipment is provided under the written down value method over the useful lives of assets as prescribed under Part C of Schedule II to the Companies Act, 2013.

F) Inventories

Inventories includes Raw materials, Work in process and the finaished goods etc. The same are valued at the lower of cost (on FIFO basis) or the net realisable value. Cost includes all charges in bringing the goods to the point of sale. Finished goods include appropriate proportion of overheads.

G) Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as expense in the period in which they are incurred.

H) Provision of taxes on income

Tax expense comprises both current and deferred tax in accordance with the requirements of Accounting Standard 22 - Accounting for taxes on Income.

1. Current Tax

Current Tax is measured at the amount expected to be paid to the tax authorities, using the tax rate and tax laws applicable for the year.

2. Deferred Tax

Deferred Tax is recognized on timing differences being the differences 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 are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty supported by convincing evidence that sufficient taxable profits will be available against which such deferred assets can be realized.

I) Employee Benefits

As per the relevant Tax law, all the eligible employees must receive benefits from a ESI, which is a defined contribution plan. Both the employees and employer each should make monthly contributions to the plan. We believe that the company will have no further obligations under the plan beyond its monthly contributions, if paid correctly and consistently. Contribution to the extent paid by the company are charged to Profit and Loss account. The company does not have a policy on payment of Gratuity and leave encashment for its employees.

J) Earnings Per Share

In determining the earnings per share, the Company considers the net profit after tax before extraordinary item and after extraordinary items and includes post - tax effect of any extraordinary items. The number of shares used in computing the basic earnings per share is the weighted average number of shares outstanding during the period. For computing diluted earnings per share, potential equity shares are added to the above weighted average number of shares.

K) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimates can be made. Provions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet and adjusted to reflect the current best estimates.

Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

L) Cash and Cash Equivalents

Cash and Cash Equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of twelve months or less.

M) Foreign Currency Transactions

1. Initial Recognition: Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction

2. Exchange Differences: All exchange differences arising on settlement and conversion of foreign currency transactions are included in the profit and loss account.