Accounting Policies of Mehul Telecom Ltd. Company

Mar 31, 2025

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation of financial statements

The Financial Statements comprises of financial statements of Mehul Telecom Limited as at 31ST
March 31, 2025, 31ST March 2024 and the Statement of Profit and Loss and Statements of Cash
Flows for the same period mentioned above and the annexure thereto (collectively, the "Financial
Statements") have been extracted by the management from the audited Financial Statements of
the Company for the year ended on 31ST March 2025 and 31ST March 2024 approved by the
respective Board of Directors of the companies.

The financial statements are prepared and presented under the historical cost convention and
evaluated on a going-concern basis using the accrual system of accounting in accordance with the
accounting principles generally accepted in India (Indian GAAP) and rules of the Companies Act
2013, including the Accounting Standards as prescribed by the Companies (Accounting Standards)
Rules, 2006 as per section 211(3C) of the Companies Act, 1956 (which are deemed to be applicable
as Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of Companies (Accounts)
Rules, 2014).

The financial statements have been prepared on an accrual basis and under the Historical Cost
Convention, and the Companies (Accounting Standards) Amendment Rules 2016 and the relevant
provisions of the Companies Act, 2013.

The presentation of financial statements requires estimates and assumption to be made that affect
the reported amount of assets & Liabilities on the date of financial statements and the reported
amount of revenue and expenses during the reporting period. Difference between the actual result
and estimates are recognized in the period in which results are known/materialized.

B. Use of Estimate

The preparation and presentation of financial statements in conformity with Generally Accepted
Accounting Principles (GAAP) requires the management of the Company to make estimates and
assumptions that affect the reported balances of assets and liabilities and disclosures relating to
the contingent liabilities, if any, as at the date of the financial statements and reported amounts of
income and expenses during the year. Examples of such estimates include provisions fair doubtful
debts, employee retirement benefit plans, provision for income tax and the useful lives of fixed
assets. The difference between the actual results Estimates are recognized in the period in
which results are known or materialized.

C. Valuation of Inventory

Inventories include mobile phones and accessories which is to be valued at Lower of Cost or Net
Realizable value as per FIFO Method.

Cost of inventories included the cost incurred in bringing each product to its present location and
conditions are accounted. Cost included cost of direct material. Cost is determined on "First in First
our basis (FIFO)".

All other inventories of stores and spares, consumables, project material at site are valued at cost.
The stock of waste or scrap is valued at net realizable value.

"Net Realizable Value" is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated cost necessary to make the sales of the products.

D. Cash Flow Statement

Cash flow statement has been prepared as per requirements of Accounting Standard - 3. Cash flows
are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts
or payments and item of income or expenses associated with investing or financing cash flows.
Cash flows from operating, investing and financing activities of the Company are segregated,
accordingly.

E. Contingencies and Events Occurring After the Balance Sheet Date

Effects of, events occurred after Balance Sheet date and having material effect on financial
statements are reflected where ever required.

F. Net Profit or loss for the period, prior period items and changes in accounting
policies

Material items of prior period, non-recurring and extra ordinary items are shown separately, If any.

G. Depreciation Accounting

Depreciation has been provided as per Written Down Value (WDV) Method provided as per the
useful life prescribed under schedule II of the Companies Act, 2013 on single shift for the year/
period ending on 31ST March 2025 and 31ST March, 2024 till the residual value of the asset is
reduced equal to 5% of the original cost.

Pro Rata Basis to result in a more appropriate preparation or presentation of the financial
statements.

In respect of assets added/sold during the period/year, pro-rata depreciation has been provided
at the rates prescribed under Schedule II.

H. Revenue Recognition

Revenue is recognized when it is probable that economic benefit associated with the transaction
flows to the Company in ordinary course of its activities and the amount of revenue can be
measured reliably, regardless of when the payment is being made. Revenue is measured at the fair
value of consideration received or receivable, taking into the account contractually defined terms
of payments, net of its returns, trade discounts and volume rebates allowed.

Revenue includes only the gross inflows of economic benefits, including the excise duty, received
and receivable by the Company, on its own account. Amount collected on behalf of third parties
such as sales tax, value added tax and goods and service tax (GST) are excluded from the Revenue.

Sale of goods is recognized at the point of dispatch of goods to customers, sales are exclusive of
Sales tax, Vat, GST and Freight Charges if any. The revenue and expenditure are accounted on a
going concern basis.

Interest Income is Recognized on a time proportion basis taking into account the amount
outstanding and the rate applicable i.e. on the basis of matching concept.

Dividend from investments in shares / units is recognized when the company receives it, if any.
Other items of Income are accounted as and when the right to receive arises.

I. Accounting for Property, Plant and Equipments

Fixed assets are stated at historical cost less accumulated depreciation and impairment losses, if
any. Cost includes purchase price and all other attributable cost to bring the assets to its working
condition for the intended use.

Assets under erection/installation are shown as "Capital Work in Progress". Expenditure during
construction period is shown as "pre-operative expenses" to be capitalized on completion of
erection/ installations of the assets.

Intangible assets are stated at acquisition cost, Net of accumulated amortization and accumulated
impairment losses, if any. Intangible assets are amortized on a written down value basis over their
estimated useful lives.

J. Accounting for effects of changes in foreign exchange rates

i. All transactions in foreign currency are recorded at the rates of exchange prevailing at
the date of transaction. Any gain/ loss on account of the fluctuation in the rate of
exchange is recognized in the statement of Profit and Loss.

ii. Monetary items in the form of Loans, Current Assets and Current Liabilities in foreign
currencies outstanding at the close of the year are converted in Indian currency at the
appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain
or loss on account of the fluctuation in the rate of exchange is recognized in the
statement of Profit and Loss.

iii. In respect of Forward Exchange contracts entered into to hedge foreign currency risks,
the difference between the forward rate and the exchange rate at the inception of the
contract is recognized as income or expense over the life of the contract. Further, the
exchange differences arising on such contracts are recognized as income or
assets/liabilities.

K. Accounting for Government Grants

Capital subsidiary receivable specific to fixed assets is treated as per accounting standard 12 and
other revenue grants is recorded as revenue items.

L. Accounting for Investments

Investments are classified in Long-term and Short-term. Long term Investments are valued at cost.
Provision is also made to recognize any diminution other than temporary in the value of such
investments. Short term investments are carried at lower of cost and fair value.

M. Employees Retirement Benefit Plan

a) Provident Fund

Provident fund is a defined contribution scheme as the company pays fixed contribution at
predetermined rates. The obligation of the company is limited to such fixed contribution. The

contributions are charged to Profit & Loss A/c.

b) Provision for Gratuity

Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The past
service cost of gratuity has been shown as an appropriation from the opening reserves. The
liability recognised in the balance sheet in respect of gratuity is the present value of the defined
benefit / obligation at the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined benefit / obligation is calculated at
or near the balance sheet date by an independent actuary using the projected unit credit
method. Actuarial gains and losses arising from past experience and changes in actuarial
assumptions are charged or credited to the statement of profit and loss in the year in which
such gains or losses are determined.

All short-term employee benefits are accounted on undiscounted basis during the accounting
period based on services rendered by employees. The Gratuity Plan provides a lump sum
payment to vested employees at retirement, death, incapacitation, or termination of
employment, of an amount based on the respective employee''s salary and the tenure of
employment with the Company.

The Company pays gratuity to the employees who have completed five years of service with
the Company at the time of resignation / retirement. The gratuity is paid at 15 days salary for
every completed year of service as per the Payment of Gratuity Act 1972.

N. Borrowing Cost

Borrowing costs directly attributable to the acquisition of qualifying assets are capitalized till the
same is ready for its intended use. A qualifying asset is one that necessarily takes substantial period
of time to get ready for intended use. All other borrowing cost is charged to revenue.

O. Segment Reporting

As the Company is engaged only in the business of trading of mobile phones and accessories, there
are no identical Business Segment of the Company. Also, there are no identical Geographical
Segment of the Company as there are no major differences in factors affecting the segment of
market.

P. Related Party Disclosure

The Disclosures of Transaction with the related parties as defined in the Accounting Standard are
given in Note - 28.

Q. Accounting for Leases

The Company has not entered into any lease agreements during the years/period.

R. Earnings Per Share

Disclosure is made in the Note - 25 as per the requirements of the Accounting Standard - 20.

In determining the Earnings Per share, the company considers the net profit after tax which does
not include any post tax effect of any extraordinary / exceptional item. The number of shares used
in computing basic earnings per share is the weighted average number of shares outstanding
during the period. The number of shares used in computing Diluted earnings per share comprises
the weighted average number of shares considered for computing Basic Earnings per share and
also the weighted number of equity shares that would have been issued on conversion of all
potentially dilutive shares.

In the event of issue of bonus shares, or share split the number of equity shares outstanding is
increased without an increase in the resources. The number of Equity shares outstanding before
the event is adjusted for the proportionate change in the number of equity shares outstanding as
if the event had occurred at the beginning of the earliest period reported.

S. Accounting for Taxes on Income

Current Tax

Provision for current tax is made after taken into consideration benefits admissible under the
provisions of the Income Tax Act, 1961.

Deferred Tax

Deferred Income Tax is provided using the liability method on all temporary difference at the

balance sheet date between the tax basis of assets and liabilities and their carrying amount for

financial reporting purposes.

1. Deferred Tax Assets are recognized for all deductible temporary differences to the extent that
it is probable that taxable profit will be available in the future against which these items can be
utilized.

2. Deferred Tax Assets and liabilities are measured at the tax rates that are expected to apply to
the period when the assets is realized or the liability is settled, based on tax rates (and the tax)
that have been enacted or enacted subsequent to the balance sheet date.

T. Discontinuing Operations

During the years/period, the company has not discontinued any of its operations.