NFRS FOR SMEs PRIVATE LIMITED

Trial Balance as on 31st Ashad 2081

2078-79 2079-80 2080-81

Closing Balance Closing Balance Closing Balance
Particulars
Debit Credit Debit Credit Debit Credit
Property, Plant and Equipment
Furniture & Fixtures 2,918,330.58 2,976,356.69 2,976,356.69
Computer 67,738.54 50,803.91 205,323.91
Office Equipments 1,182,631.33 886,973.50 886,973.50
Motors & Vehicles 1,985,451.71 1,588,361.37 1,802,861.37
Land 2,500,000.00 2,500,000.00 2,500,000.00
Generator 469,714.55 399,257.37 399,257.37
Intangible Assets 89,600.01 71,680.01 71,680.01
Tomato Vines 1,012,540.00 1,450,214.00 1,542,087.00
Tomato harvested (Agriclutural
Produce) FV at time o harvest 500,000.00 600,000.00 700,000.00

Depreciation Furniture & Fixtures 992,118.90

Depreciation Computer 16,934.64
Depreciation Office Equipments 295,657.83
Depreciation Motors & Vehicles 397,090.34
Depreciation Generator 70,457.18
Depreciation Intangible Assets 17,920.00
Opening Inventory 32,773,867.32 32,773,867.32 40,551,097.53
Trade Receivables 25,941,142.57 28,955,559.04 37,122,358.79
Letter of Credit Margin 3,155,904.02 3,275,886.40 3,569,285.68
Advance to Suppliers 4,507,997.34 4,818,199.48 4,913,633.07
Advance Income Tax 1,332,000.00 1,400,000.00 1,000,000.00
Loans and advance to Employees 2,500,000.00 2,500,000.00
Provision for Income Tax 1,521,805.90 1,512,181.67
Rent Security 315,000.00 366,000.00 366,000.00
Security Deposit (Telephone) 2,250.00 4,500.00 4,500.00
Investment 10,000,000.00 10,000,000.00 10,000,000.00
Cash in hand 740,037.23 646,935.69 413,422.35
Cash at Bank 7,644,472.27 8,385,631.19 7,858,860.51
Cash at Bank ($ 25000 @ 110) 2,750,000.00 2,750,000.00 2,750,000.00
Share Capital 2,000,000.00 2,000,000.00 2,000,000.00
Retained Earning 16,431,751.44 16,431,751.44 20,968,296.44
Term Loan 3,531,752.86 4,543,323.52 4,866,971.72
Trade Payables 35,959,090.73 36,049,413.99 36,688,391.47
Sundry Creditors 11,471,906.67 11,833,035.13 12,075,720.05
TR Loan 22,151,000.00 30,074,205.24 24,957,890.24
Government Loan - - 5,000,000.00
Overdraft 6,624,369.87 7,000,000.00 27,000,000.00
TDS Payable
Expenses Payable
Advance from Customers
Audit Fee Payable 197,000.00 197,000.00 197,000.00
CIT Payable
Revenue from Operations 888,697,779.00 806,041,872.95

Revenue from Construction Contract 100,000,000.00

Other Income 371,345.90
Purchase 786,212,734.82 688,205,940.07
Construction Contract Expenses 100,000,000.00
Audit Fee 200,000.00 200,000.00
Bank Commission 412,844.82 412,987.00
Salary & Allowances 30,447,945.07 51,076,917.39
Electricity & Water 221,648.00 2,734,397.45
Insurance 1,330,620.32 1,603,441.28
Office Expenses 3,059,718.12 3,436,662.66
Rent Expenses 11,023,476.25 11,801,939.70
Advertisement 7,260,754.35 7,039,094.80
Sales Incentive /Promotion 8,259,015.09 8,819,691.43
Freight Outward 38,203,840.20 39,288,380.94
Finance Cost 2,374,852.34 3,042,992.39
Income Tax Expenses 1,512,181.67
99,888,677.47 99,888,677.47 998,710,035.88 998,710,035.88 1,039,796,142.87 1,039,796,142.87
Closing Stock 40,551,097.53 39,743,950.80
 Adjustment Entries
1 Retained Earning 2078-79 Dr 145,916.58
Furniture Fixtures Cr 145,916.58
(Being Assets revalued as deemed cost as
on the date of transition)

2 Computer Dr 10,160.46
Retained Earning 2078-79 Cr 10,160.46
(Being Assets revalued as deemed cost as
on the date of transition)

3 Office Equipments Dr 177,394.67

Retained Earning 2078-79 Cr 177,394.67
(Being Assets revalued as deemed cost as
on the date of transition)

4 Retained Earning 2078-79 Dr 485,451.71

Motors & Vehicles Cr 485,451.71
(Being Assets revalued as deemed cost as
on the date of transition)

5 Land Dr 7,500,000.00
Revaluation Reserve 2078-79 Cr 7,500,000.00
(Being Assets revalued as deemed cost as
on the date of transition)

6 Generator Dr 30,285.45
Retained Earning 2078-79 Cr 30,285.45
(Being Assets revalued as deemed cost as
on the date of transition)

7 Land Dr 5,000,000.00
Other Comprehensive Income (Revaluation Surplus)
Cr 5,000,000.00
(Being Assets revalued as on 2081.01.31)

8 Profit and Loss Dr 767,762.25

Office Equipment and Furnitures Cr 574,912.25
Plant and Machinery Cr 61,250.00
Vehicle Cr 131,600.00
(Being Assets revalued as on 2081.01.31)

9 Tomato Vines (Biological Assets) Dr 187,460.00

Profit and Loss Account Cr 187,460.00
(Being Tomato vines measured at fair value 2078-79)

10 Profit and Loss Account Dr 137,674.00

Tomato Vines (Biological Assets) Cr 137,674.00
(Being Tomato vines measured at fair value 2079-80)

11 Profit and Loss Account Dr 91,873.00

Tomato Vines (Biological Assets) Cr 91,873.00
(Being Tomato vines measured at fair value 2080-81)

12 Impairment Loss Dr 100,000.00

Invetory of Tomato Cr 100,000.00
(Being decrease in value of inventory)

13 Impairment Loss Dr 641570

x Inventory Finished Goods Cr 641570
(Being inventory impaired due to damage)

14 Investment Dr 1,000,000.00
Profit and Loss Account Cr 1000000
(Being change in fair value of investment
as reporting date 2079.04.01)

15 Profit and Loss Account Dr 1,500,000.00

Investment Cr 1500000
(Being change in fair value of investment
as reporting date 2080.03.31)

16 Investment Dr 500000
Profit and Loss Account Cr 500000
(Being change in fair value of investment
as reporting date 2081.03.31)

17 Foreign Currency Translation Loss Dr 125000

Cash at Bank Cr 125000
(Being foreign currency translation loss
recognised 2079.04.01)

18 Cash at Bank Dr 150000

Foreign Currency Translation Gain Cr 150000
(Being foreign currency translation gain
recognised 2080-3-31 )
19 Foreign Currency Translation Loss Dr 75000
Cash at Bank Cr 75000
(Being foreign currency translation loss
recognised 2081-03-31)

20 Employment Benefit Paid in Advance Dr 340,406.00

Loan Receivable Cr 340,406.00
(Being recognition of loans and advance to
employees 79-80)

21 Loan Receivable Dr 107,979.70

Profit or Loss - Interest Income Cr 107,979.70
(To recognise interest income on an
employee-loan 79-80.)

22 Employment Benefit Expenses Dr 107,979.70

Employment Benefit Paid in Advance Cr 107,979.70
(Being employment benefit recognised as expenses)

23 Loan Receivable Dr 113,378.68

Profit or Loss - Interest Income Cr 113,378.68
(To recognise interest income on an
employee-loan 80-81.)

24 Employment Benefit Expenses Dr 113,378.68

Employment Benefit Paid in Advance Cr 113,378.68
(Being employment benefit recognised as expenses)

Carrying amount as at Carrying amount as at 31st

Year 1st Shrawan Interest @ 5% Cash Inflow Ashad
1 2,159,594.00 107,979.70 0 2,267,573.70
2 2,267,573.70 113,378.68 0 2,380,952.38
3 2,380,952.38 119,047.62 0 2,500,000.00

Year 0 1 2 3
Interest Rate 5% 5% 5% 5%
Future Value 2,500,000.00
Present Value (2,159,594.00)

25 Revenue Dr 513,148.01
Debtors Cr 513,148.01
(Being revenue and debtors recognised
earlier been reversed)

26 Debtors Dr 248,685.20
Interest income Cr 248,685.20
(Being interest income recognised in
deferred terms of payment of debtors)

27 Profit or Loss (Impairment expenses) Dr 1,000,000.00

Bad Debt Provision Cr 1,000,000.00
(To recognise the impairment loss.)

Carrying amount as at Carrying amount as at 31st

Year 1st Shrawan Interest @ 10% Cash Inflow Ashad
1 2,486,851.99 248,685.20 1,000,000.00 1,735,537.19
2 1,735,537.19 173,553.72 1,000,000.00 909,090.91
3 909,090.91 90,909.09 1,000,000.00 0.00

Year 0 1 2 3
Interest Rate 10% 10% 10% 10%
Future Value -
Present Value (2,486,851.99)

28 Government Loan Dr 1,243,426.00

Government Grant Income Cr 1,243,426.00
(Being government grant income recognised)

29 Interest Expenses Dr 375,657.40

Government Loan Cr 375,657.40
(Being interest expenses recognised)

Carrying amount as at Carrying amount as at 31st

Year 1st Shrawan Interest @ 10% Cash Inflow Ashad
1 3,756,574.00 375,657.40 - 4,132,231.40
2 4,132,231.40 413,223.14 - 4,545,454.55
3 4,545,454.55 454,545.45 - 5,000,000.00

Year 0 1 2 3
Interest Rate 10% 10% 10% 10%
Future Value 5,000,000.00
Present Value (3,756,574.00)

30 Term Loan Dr 1,000,000.00

Current portion of term loan Cr 1,000,000.00
(Being current portion of term loan recognised 2079.04.01)

31 Term Loan Dr 1,200,000.00

Current portion of term loan Cr 1,200,000.00
(Being current portion of term loan recognised 2080.03.31)
32 Term Loan Dr 1,600,000.00
Current portion of term loan Cr 1,600,000.00
(Being current portion of term loan recognised 2081.03.31)

33 Retained Earning Dr 3,927,663.00

Provision for Gratuity Liability Cr 2,457,089.00
Provision for Leave Encashment Liability Cr 524,785.00
Provision for Medical Allowance Liability Cr 945,789.00
(Being provision made for employent benefit 2079.04.01)

34 Provision for Gratuity Dr 400,000.00

Provision for Leave Encashment Dr 150,000.00
Provision for Medical Allowance Dr 250,000.00
Provision for Gratuity Liability Cr 400,000.00
Provision for Leave Encashment Liability Cr 150,000.00
Provision for Medical Allowance Liability Cr 250,000.00
(Being provision booked 2079-80)

35 Provision for Gratuity Dr 450,000.00

Provision for Leave Encashment Dr 200,000.00
Provision for Medical Allowance Dr 300,000.00
Provision for Gratuity Liability Cr 450,000.00
Provision for Leave Encashment Liability Cr 200,000.00
Provision for Medical Allowance Liability Cr 300,000.00
(Being provision booked 2080-81)

36 Closing Inventory Dr 10,000,000.00

Construction Cost Cr 10,000,000.00
(Being inventory recognised)

37 Gross amount due from Customers Dr 12,500,000.00

Construction Contract Income Cr 12,500,000.00
(Being revenue booked as per percentage completion method)

Particulars Amount
Initial estimated contract price 500,000,000.00
Initial Estimated Contract Expenses 400,000,000.00
Actual Expenses till date 90,000,000.00
% Completion 22.50
Income from Long term contract 112,500,000.00
Income booked 100,000,000.00
Gross amount due from customers 12,500,000.00

As per PL Account As per Tax

Profit 1,000,000 1,000,000
Less: Provision for Gratuity 300000 0

Net Profit 700,000 1,000,000

Income Tax Provision @ 25% (Current Tax) 250,000 250,000
Deferred Tax (75,000)
Net Tax 175,000
Balance Sheet
Carrying Amount Tax Base
Gratuity 300000 0
 NFRS FOR SMEs PRIVATE LIMITED

Statement of Financial Position

As at 31st Ashad 2080 (15th July 2024)

Restated*
As at As at
Ref Note 31st Ashad 2081 31st Ashad 2080

ASSETS
Non-Current Assets
Property, plant and equipment 94 4 18,800,000 15,570,363
Intangible assets 113 5 53,760 71,680
Financial Assets 27, 55 6 2,380,952 2,267,574
Investments 70,74 7 10,000,000 9,500,000
Other Non-Current Assets 8 - 232,426
Deferred tax assets 283 9 - -
Total Non-Current Assets 31,234,712 27,642,043

Current assets
Inventories 59 10 49,702,381 41,151,098
Biological assets 330 11 1,500,000 1,500,000
Trade and other receivables 12 57,330,362 37,420,145
Income tax receivables 283 13 - -
Cash and cash equivalents 14 10,972,283 11,807,567
Total current assets 119,505,026 91,878,809
Total assets 150,739,738 119,520,852

EQUITY AND LIABILITIES

Equity
Share capital 185 15 2,000,000 2,000,000
Revaluation Reserve 94 16 12,500,000 7,500,000
Retained earnings 17 18,191,606 14,980,096
Total Equity 32,691,606 24,480,096

Liabilities
Non-Current Liabilities
Loans and borrowings 185 18 7,399,203 3,343,324
Employee Benefits 259 19 5,677,663 4,727,663
Deferred Tax Liabilities 283 9 1,338,090 503,933
Total Non-Current Liabilities 14,414,956 8,574,920

Current Liabilities
Loans and borrowings 185 18 53,557,890 38,274,205
Trade and other payables 185 20 48,961,112 48,079,449
Income Tax Liability 13 1,114,174 112,182
Total Current Liabilities 103,633,176 86,465,836

Total Liabilities 118,048,132 95,040,756

Total Equity and Liabilities 150,739,739 119,520,852

The accompanying notes form an integral part of these financial statements.

 NFRS FOR SMEs PRIVATE LIMITED

Income Statement
For the year ended 31st Ashad 2081 (15th July 2024)

Figures in NPR
Ref Note FY 2080-81 FY 2079-80

Revenue from operations 200 21 805,528,725 888,697,779

Construction Contract Income 200 22 112,500,000 -
Grant Income 228 23 1,243,426 -
Interest Income 200 24 362,064 107,980
Other Income 27, 55 25 500,000 521,346
Total Income 920,134,215 889,327,105
Material Consumed Expenses 59 26 (689,654,657) (778,435,505)
Construction Contract Cost 200 27 (90,000,000) -
Employee Benefit Expenses 259 28 (52,140,296) (31,355,925)
Finance Cost 235 29 (3,831,637) (2,787,697)
Selling and Distribution Expenses 30 (55,147,167) (53,723,610)
Administrative Expenses 31 (19,776,441) (15,835,463)
Depreciation and Amortisation Expenses 94, 113 32 (2,157,303) (1,708,041)
Other Operating Expenses 251, 300 33 (1,266,873) (1,637,674)
Profit/(Loss) Before Tax 6,159,841 3,843,191
Income Tax Expense 172 34 (1,698,331) (960,798)
Profit/(Loss) from continuing operations 4,461,510 2,882,393
Profit /(Loss) on Discontinued Operations
(Net of tax)
Net Profit/(Loss) for the year 4,461,510 2,882,393

The accompanying notes form an integral part of these financial statements.

 NFRS FOR SMEs PRIVATE LIMITED

Statement of Comprehensive Income

For the year ended 31st Ashad 2081 (15th July 2024)

Figures in NPR
FY 2080-81 FY 2079-80

Net Profit for the year as per Profit of Loss Statement 4,461,510 2,882,393
Other comprehensive Income
Exchange Gain/Loss arising on translation of foreign - -
operations
Actuarial Gain/(Loss) on defined Employment benefit - -
Gain/Loss on Revaluation 5,000,000 -
Deferred Tax Income/(Expenses) (1,250,000) -
Total Comprehensive gain/(loss) for the year, net of tax 8,211,510 2,882,393
 NFRS FOR SMEs PRIVATE LIMITED

Statement of Changes in Equity

For the year ended 31st Ashad 2081 (15th July 2024)
Figures in NPR
Revaluation
Notes Share capital Retained earnings Total
Reserve
Balance at 1st Shrawan 2079 2,000,000 - 16,431,751 18,431,751
Restatement on transition to NFRS for
SMEs - 7,500,000 (4,334,048) 3,165,952
2,000,000 7,500,000 12,097,703 21,597,703
Balance at 1st Shrawan 2079 as restated (Being Assets revalued as deemed cost as on the date of transition)
PROFIT FOR THE YEAR - - 2,882,393 2,882,393
OTHER COMPREHENSIVE INCOME
(LOSS): - -
Translation differences on consolidation - - -
Gain/Loss on Revaluation - -
Actuarial loss on employee benefit
obligations, net of tax - - -
TOTAL COMPREHENSIVE INCOME - - - -
TRANSACTIONS WITH EQUITY
HOLDERS:
Dividend paid - Final for 2078-2079 - - -
Balance at 31st Ashad 2080 2,000,000 7,500,000 14,980,096 24,480,096
PROFIT FOR THE YEAR 4,461,510 4,461,510
OTHER COMPREHENSIVE INCOME
(LOSS): - - -
Translation differences on consolidation - - - -
Gain/Loss on Revaluation 5,000,000 5,000,000
Actuarial loss on employee benefit
obligations, net of tax - - - -
Deferred Tax Expenses (1,250,000) (1,250,000)
TOTAL COMPREHENSIVE INCOME - - 3,750,000 - 3,750,000
TRANSACTIONS WITH EQUITY
HOLDERS:
Dividend paid - Final for 2079-2080 - - -
Issue of shares -
Balance at 31st Ashad 2081 2,000,000 11,250,000 19,441,606 32,691,606
The accompanying notes form an integral part of these financial statements.
 NFRS FOR SMEs PRIVATE LIMITED

Statement of Cash Flows

For the year ended 31st Ashad 20781 (15th July 2024)
Figures in NPR
FY 2080-81 FY 2079-80

CASH FLOWS FROM OPERATING ACTIVITIES

Net Profit for the year 4,461,510 2,882,393
Adjustments for:
Provision for Income Tax 1,698,331 960,798
Depreciation and amortization charge of PPE and Intangible assets 2,157,303 1,708,041
Provision for termination benefits - -
Fair value gain – quoted shares (500,000) 1,500,000
Grant from GON in form of Interest Free Loan (1,243,426) -
Interest Income (non cash item) (362,064) (107,980)
Employee Benefit Expenses (non cash item) 1,063,379 907,980
Interest Expense (Government Loan) 375,657 -
Interest expense 3,455,979 2,787,697
Working capital adjustments:
(Increase) / decrease in Current Assets (28,212,816) (11,675,081)
Increase / (decrease) in Current Liabilities 16,165,347 8,950,287
Cash generated from operations (940,799) 7,914,135
Interest paid (3,455,979) (2,787,697)
Income Tax Paid (1,112,182) (1,589,806)
NET CASH FLOWS FROM OPERATING ACTIVITIES [A] (5,508,960) 3,536,632
CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Purchase of property, plant and equipment (369,020) (1,050,145)
Purchase of intangible asset - -
Dividends received - -
Proceeds from disposal of property, plant and equipment - -
Change in Financial Asset (113,379) (2,267,574)
Change in Other Non- Current Asset 232,426 (232,426)
Proceeds from sale of quoted shares - -
NET CASH FLOWS FROM INVESTING ACTIVITIES [B] (249,972) (3,550,145)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of ordinary shares - -
Change in Employee Benefit - -
Net (repayment of) increase in borrowings 4,923,648 811,571
Dividends paid - -
NET CASH FLOWS FROM FINANCING ACTIVITIES [C ] 4,923,648 811,571

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS [A+B+C] (835,284) 798,057

MOVEMENT IN CASH AND CASH EQUIVALENTS
Beginning of Year 11,807,567 11,009,510
(Decrease)/increase
Effect of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS, End of Period* 10,972,283 11,807,567

The accompanying notes form an integral part of these financial statements.

 NFRS FOR SMEs PRIVATE LIMITED

Financial Year 2080-081

Notes to the Financial Statements

1 General Information
NFRS FOR SME PRIVATE LIMITED (“the Company”) is domiciled in Nepal where it is incorporated as a limited liability company
under the Companies Act. The address of its registered office is Kathmandu, Nepal. The Company operates manufacturing business in
six towns in Nepal .
These financial statements were approved for issue by the Board of Directors on ...........
2 Significant Accounting Policies
(Being Assets revalued as deemed cost as on the date of transition)
2.1 Basis of Preparation and measurement
I Statement of Compliance

The Financial statements have been prepared in accordance with applicable Nepal Financial Reporting Standards for Small and
Medium Sized Entities (NFRS for SMEs) as issued by the Institute of Chartered Accountants of Nepal (ICAN). The Financial
Statements have also been prepared in accordance with the relevant presentational requirements of the Companies Act, 2063 of Nepal.
These financial statements for the year ended 31 Ashadh, 2081 are the first the Company has prepared under NFRS for SMEs. For all
periods up to and including the year ended 31 Ashadh, 2080, the Company prepared its financial statements in accordance with earlier
issued Nepal Accounting Standards (hereinafter referred to as 'Previous GAAP') used for its statutory reporting requirement in Nepal
immediately before adopting NFRS for SMEs. The financial statements for the year ended 31 Ashadh, 2080 and the opening Balance
Sheet as at 1 Shrawan, 2079 have been restated in accordance with NFRS for SMEs for comparative information. Reconciliations and
explanations of the effect of the transition from Previous GAAP to NFRS for SMEs on the Company's statement of Financial Position,
Income Statement and Statement of Cash Flows are provided in Note 3.

II Basis of Preparation
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to
all the periods presented in the financial statements, including the preparation of the opening NFRS for SMEs Statement of Financial
Position as at 1 Shrawan, 2079 being the 'date of transition to NFRS for SMEs'. All assets and liabilities have been classified as
current or non-current as per the Company's normal operating cycle. Based on the nature of products and the time between acquisition
of assets of processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current or non-current classification of assets and liabilities.
III Basis of Measurement
The financial statements have been prepared on historical cost basis and under accrual basis of accounting except otherwise stated.

IV Functional and Reporting Currency

The financial statements are prepared in Nepalese Rupees (NPR), which is also the functional currency. All financial information
presented in Nepalese Rupees has been rounded to the nearest Rupees and hence there may not add up and may have rounding
difference.
2.2 Critical accounting estimates and judgements
The preparation of the financial statements in conformity with NFRS for SMEs requires the use of certain critical accounting
estimates and judgments. It also requires management to exercise judgement in the process of applying the Company's accounting
policies. The Company makes certain estimates and assumptions regarding the future events. Estimates and judgments are
continuously evaluated based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Management believes that the estimates used in the preparation of the financial statements are
prudent and reasonable. Future results could differ from these estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within the next financial year primarily includes: -

I USEFUL LIFE AND RESIDUAL VALUE OF PROPERTY, PLANT AND EQUIPMENT

Management reviews the useful life and residual values of property, plant and equipment at least once a year. Such life is dependent
upon an assessment of both the technical life of the assets and also their likely economic life, based on various internal and external
factors including relative efficiency and operating costs. Accordingly, depreciable lives are reviewed annually using the best
information available to the Management.
II IMPARIMENT OF PROPERTY, PLANT AND EQUIPMENT
At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of
fair value less costs to sell and value in use. Value in use is usually determined on the basis of discounted estimated future cash flows.
This involves management estimates on anticipated commodity prices, market demand and supply, economic and regulatory
environment, discount rates and other factors. Any subsequent changes to cash flow due to changes in the above mentioned factors
could impact the carrying value of assets.

III CONTINGENCIES
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential
liabilities that are possible but not probable of crystallizing or are very difficult to quantify reliably are treated as contingent liabilities.
Such liabilities are disclosed in the notes but are not recognized.

IV FAIR VALUE MEASUREMENTS

Some of the Company's assets and liabilities are measured at fair value for financial reporting purposes. The management determines
the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset or a liability, the
Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third
party qualified valuers to perform the valuation. The management works closely with the qualified external valuers to establish the
appropriate valuation techniques and inputs to the model.

V RECOGNITION OF DEFERRED TAX

Significant management judgement is required to determine the amount of deferred tax that can be recognized, based upon the likely
timing and the level of future taxable profits together with future tax planning strategies. The Company based its assumptions and
estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising beyond the control of the Company.

2.3 Property, Plant and Equipment

i. On transition to NFRS for SMEs, the Company has elected to revalue the carrying value of all of its property, plant and equipment
recognized as at 32nd Ashadh, 2079 measured as per the previous GAAP and use that carrying value as the property, plant and
equipment as on Shrawan 1, 2079.
ii. All the items of property, plant and equipment are stated at revalued amount less accumulated depreciation and accumulated
impairment losses, if any.
iii. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only 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. The carrying amount of any component accounted for as separate assets are derecognized when replaced. All other repairs
and maintenance are charged to profit and loss during the reporting period in which they are incurred.
iv. The company identifies and determines cost of each component/part of the asset separately, if the component/ part has a cost which
is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These
components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.
v. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
vi. An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss
when the asset is derecognized.

2.4 Other Intangible Assets

i. Certain computer software costs are capitalized and recognized as intangible assets based on materiality, accounting prudence and
significant benefits expected to flow there from for a period longer than one year.
2.5 Depreciation and Amortization

i. Depreciation is recognized so as to write off the cost of assets less their residual values over their useful lives, using the written
down method.
ii. Amortization is recognized so as to write off the cost of assets less their residual values over their useful lives, using the written
down method.
iii. Depreciation is provided on the written down method based on the estimated useful lives of the assets determined by the
management. Depreciation on additions to fixed assets is charged on pro-rata basis in the year of purchase. The useful life of the
assets and the corresponding rates at which the assets are depreciated are as follows: -

Depreciation
Category of Assets
Rate
Plant & Equipment 15%
Office Equipment 25%
Furniture and Fixtures 25%
Vehicles 20%
Computer software is amortized over an estimated useful life of 5 years on straight line method.

iv. Useful life is either the period of time which the asset is expected to be used. The estimated useful life, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis.
v. Office furniture, equipment and vehicles costing less than NPR 5,000 per unit and plant equipment costing less than NPR 10,000
per unit is charged to the profit and loss account in the year of purchase.
vi. Cost of Dismantling (if any) has not be taken into consideration for the calculation of Value of Property, plant & Equipment due to
lack of sufficient evidence in that regard.

2.6 Impairment of tangible and intangible assets

i. At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the
asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest Company of cash-generating units for which a reasonable and
consistent allocation basis can be identified.
ii. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired.
iii. Recoverable amount is the higher of fair value less costs of disposal and value in sue. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
iv. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in Statement
of Profit and Loss.

2.7 Borrowing Cost

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are are expensed in the period in which they occur.
2.8 Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand deposits with an original maturity of
three months or less and highly liquid investments that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value net of outstanding bank overdrafts as they are not considered an integral part of the Company's
cash management. Foreign currency hel by the company has been revalued at reporting date as per the rate of exchange precribed by
Nepal Rastra Bank (Central Bank of Nepal)
2.9 Inventories
Cost of inventories includes cost of purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition. Inventories of store, spare parts and loose tools are stated at the lower of weighted average cost and net
realizable value. Net realizable value represents the estimated selling price for inventories in the ordinary course of business less all
estimated costs of completion and estimated costs necessary to make the sale.

2.10 AGRICULTURE
An entity that carries out biological activities accounts for each class of biological asset using the fair value model (if readily
determinable without undue cost or effort.
Biological asset is measured at fair value initially, and at each reporting date
Changes in fair value are recognised in profit or loss
Agricultural produce harvested from an entity’s biological assets is measured at its fair value less costs to sell at the point of harvest.
This measurement is the cost at that date when applying Section 13 of NFRS for SMEs.

2.11 Revenue Recognition

The following specific criteria are used for the purpose of recognition of revenue. Consideration that will be derived from the sale of

goods. Sales are recognized net of trade discounts, price reduction, and indirect coverage subsidy, rebates, Incentives, sales taxes.

I Sale of Goods
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have transferred to the
buyer, the Company retains no effective control of the goods transferred to a degree usually associated with ownership and no
significant uncertainty exists regarding the amount of the goods sold.

II Insurance Claim Income and Interest Income

a. Insurance claim income (net of withholding taxes if any) is recognized when the right to receive payment has been established

(provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).
b. Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the
amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and
at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount on initial recognition.

III Government grants

Government grants are recognised at the fair value of the asset received or receivable. A grant without specified future performance
conditions is recognised in income when the grant proceeds are receivable. A grant that imposes specified future performance
conditions is recognised in income when those conditions are met. Government grants are presented separately from the assets to
which they relate. Government grants recognised in income are presented separately in the notes. Government grants received before
the income recognition criteria are satisfied are presented as a separate liability in the statement of financial position. No amount is
recognised for those forms of government assistance that cannot reasonable have a value placed on them. However, the entity
discloses information about such assistance.

IV CONSTRUCTION CONTRACTS
Percentage of completion method i.e. The proportion that costs incurred for work performed to date bear to the estimated total costs.
Costs incurred for work performed to date do not include costs relating to future activity, such as for materials or prepayments is
used to recognise revenue from construction contracts. An entity has reviewed and, when necessary, revise the estimates of revenue
and costs as the construction contract progresses.

V Other Income
Other incomes are recognized on an accrual basis.

2.12 Foreign Currency Transactions

a. The functional currency of the Company is determined on the basis of the primary economic environment in which it operates. The
functional currency of the Company is Nepalese Rupee (NPR).
b. In preparing the financial statements of the Company, transactions in currencies other than the entity's functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
c. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that
date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined.
d. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
e. Exchange differences on monetary items are recognized in Statement of Profit and Loss in the period in the period in which they
arise.
2.13 Employment Benefits

The Company have schemes of employment benefits namely provident fund, employee gratuity, other retirement benefit and
accumulate leave payable so far.
Short term and long-term employment benefits
a. A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the

period related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
b. Liabilities recognized in respect of short-term employee and contractual employees, benefits are measured at the undiscounted
amount of the benefits expected to be paid in exchange for the related service.

2.14 Taxation
INCOME TAX
Income tax on the profit or loss for the year comprises current taxes and deferred taxes. Income tax is recognized in the profit or loss
statement except to the extent that it relates to items recognized directly to equity.
CURRENT TAX
Current tax is the expected tax payable on the taxable income for the year using tax rates at the balance sheet date and any adjustment
to tax payable in respect of previous years.
Income tax rates applicable to company:
Income from Trading: 25%
DEFERRED TAX
a. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred
tax provided is based on the expected realization or settlement of the carrying amount of assets and liabilities using tax rates at the
balance sheet date.
b. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled
or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting
period.

2.15 Provisions, contingencies and commitments

a. Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation.
b. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset, but
only when the reimbursement is virtually certain.
c. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
d. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.
e. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or
ono-occurrence of one or more uncertain future events not wholly within the control of the entity.
f. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each reporting period.
2.16 FINANCIAL ASSETS
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business
model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financialv assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
Financial asset not measured at amortized cost or at fair value other comprehensive income is carried at fair value through the
statement of profit and loss.
For financial assets maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the
shorter maturity of these instruments.
Investments in non-puttable ordinary shares
Investments in non-puttable ordinary shares in entities that are not associates, joint ventures or subsidiaries are initially measured at

the transaction price, excluding any transaction costs. Thereafter such investments are measured at fair value with changes in fair

value recognised in Income Statement. If fair value cannot be measured reliably, investments are measured at cost less impairment.
Loan receivables
Entity occasionally provides its associates or employees with loans. Loan receivables are measured at amortised cost using the
effective interest method less any impairment. Interest income is included in other income.
Trade receivables
Most sales are made on normal short-term credit terms. Trade receivables in respect of such sales are measured at the undiscounted
amount of cash expected to be received less any impairment. For sales made on terms that extend beyond normal credit terms,
receivables are initially measured at the present value of future receipts discounted at a market rate of interest and are subsequently
measured at amortised cost using the effective interest method.
Impairment of financial assets
At the end of each reporting period, the carrying amounts of financial assets that are not measured at fair value are reviewed to
determine whether there is any objective evidence of impairment. If so, an impairment loss is recognised immediately in profit or loss
and the carrying amount of trade receivables is reduced accordingly.

Impairment of financial assets

Loss allowance for expected credit losses is recognized for financial assets measured at amortized cost and fair value through the
statement of profit or loss.
The company recognizes impairment loss on trade receivable using expected credit loss model. For financial assets whose credit risk
has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognized.
Loss allowance equal to the lifetime expected credit losses is recognized if the credit risk on the financial instruments has significantly
increased since initial recognition.
De-recognition of financial assets
The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or it
transfers the financial asset and the transfer qualifies for de-recognition under NFRS for SMEs Section 11. If the Company neither
transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company
recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to
recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the carrying amounts measured at the date of de-
recognition and the consideration received is recognized in statement of profit or loss.
 NFRS FOR SMEs PRIVATE LIMITED

Financial Year 2080-081

Notes to the Financial Statements

3 FIRST TIME ADOPTION OF NFRS for SMEs

The financial statements have been prepared in accordance with applicable Nepal Financial Reporting Standards for Small and
st
Medium Sized Entities (NFRS for SMEs) as issued by the Institute of Chartered Accountants of Nepal (ICAN) with effect from 1
st
Shrawan, 2080, with a transition date of 1 Shrawan, 2079. These financial statements for the year ended 31st Ashadh, 2081 are the
st
first the company has prepared under NFRS for SMEs. For all periods up to and including the year ended 31 Ashadh 2080, the
Company prepared its financial statements in accordance with earlier issued Nepal Accounting Standards (hereinafter referred to as
'Previous GAAP').
The Adoption of NFRS for SMEs has been carried out in accordance with Section 35, Transition to NFRS for SMRs. Section 35
requires that all NFRS for SMEs and interpretations that are issued and effective for the first NFRS for SMEs financial statements be
applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements
which comply with NFRS for SMEs for the year ended 31st Ashadh, 2081, together with the comparative information as at and for the
st st
year ended 31 Ashadh, 2080 and the opening NFRS for SMEs Statement of Financial Position as at 1 Shrawan, 2079, the date of
transition to NFRS for SMEs.
(Being Assets revalued as deemed cost as on the date of transition)

A. EXEMPTIONS FROM RETROSPECTIVE APPLICATION

Section 35 allows first-time adopters certain exemptions from retrospective application of certain requirements under NFRS for
SMEs. The Company has elected to apply the following optional exemptions from retrospective application:

a) Deemed cost for property, plant and equipment and intangible assets
The Company has elected to measure all its property, plant and equipment, intangible assets at the revalued amount as its deemed cost
on the date of transition to NFRS for SMEs.

B. EXCEPTIONS TO RETROSPECTIVE APPLICATION

The Company has applied the following exceptions to the retrospective application of NFRS for SMEs as mandatorily required under
Section 35:
a) Estimates
On assessment of the estimates made under the Previous GAAP financial statements, the Company has concluded that there is no
necessity to revise the estimates under NFRS for SMEs, as there is no objective evidence that those estimates were in error. However,
estimates that were required under NFRS for SMEs but not required under Previous GAAP are made by the Company for the relevant
reporting dates reflecting conditions existing as at that date.

b) Classification and measurement of financial assets

The classification of financial assets to be measured at amortized cost or fair value through other comprehensive income is made on
the basis of the facts and circumstances that existed on the date of transition to NFRS for SMEs.

c) De-recognition of financial assets and liabilities

The Company has applied the de-recognition requirements of financial assets and financial liabilities.

C. TRANSITION TO NFRS for SMEs – RECONCILIATIONS

The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous
GAAP to NFRS for SMEs in accordance with Section 35:
I. Reconciliation of Equity as at 1st Shrawan, 2079
II. Reconciliation of Equity as at 31st Ashadh, 2080
III. Reconciliation of Statement of Profit or Loss for the year ended 31 st Ashadh, 2080
IV. Adjustments to Statement of Cash Flows.
Previous GAAP information has been reclassified/ regrouped in accordance with NFRS for SMEs, wherever necessary, based on the
audited financial statements of the Company for the year ended 31 st Ashadh, 2080 and 31st Ashadh, 2079.
Bank balances other than cash and cash equivalent has now been excluded from components of cash and cash equivalent for
presentation of Statement of Cash Flows.

Property, plant and equipment

a. Computer software was included under PPE which has been now reclassified as intangible assets.
b. Depreciation on Property, plant and equipment has been charged as per useful life method, which was previously charged as per
legal provision specified in Income Tax Act, 2058.

Intangible Asset
a. Computer software was included under PPE which has now been reclassified as intangible assets.

Deferred Tax
a. Deferred Tax has been created for the first time, deferred tax liability is majorly created due to carrying amount of tangible and
intangible assets.

Loans & Advances

a. Loans & Advances has been reclassified as other financial assets & other current assets.

Accounts receivable
a. Accounts receivable has been reclassified as other current assets.

Bank Balance other than cash and cash equivalent

a. Bank balance other than cash and cash equivalent was earlier classified as deposits.

Other Financial Assets

a. Amounts classified earlier as Loans & Advances has been partly reclassified as other financial assets.

Other Current Assets

a. Other Current assets were earlier classified as Loans & Advances.

TDS Payable
a. TDS Payable has been reclassified as Other Liabilities.

Provision for Income Tax

a. Provision for Income Tax has been reclassified as Current Tax Liability (net).

Current Tax Liability (net)

a. Provision for Income Tax has been reclassified as Current Tax Liability (net).
b. Advance Tax Paid and TDS Receivable has been adjusted with Current Tax Liability (net).

Depreciation on Property, Plant & Equipment

a. Depreciation on Property, plant and equipment has been charged as per useful life method, which was previously charged.

Amortization of Intangible Assets

a. Amortization of Intangible Assets was included under Depreciation on Property, plant & equipment which has now reclassified
as amortization of intangible assets.

Administrative and other operating expenses

a. Administrative expenses and other operating expenses were included under Administrative expenses has been reclassified as
administrative expenses and other operating expenses.
Other Income
a. Interest Income was included under Other income has been now reclassified as Finance Income.
Finance Income.
a. Interest income was included under other income has been now reclassified as Finance Income.
Finance Cost
a. ABBS charge was included under Administrative expenses has been now reclassified as Finance Cost.
Deferred Tax Credit / Charge
a. Deferred Tax has been created out of depreciation charges because of deprecation as per books of accounts and tax laws.
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

4 Property, plant and equipment

Freehold Land Office Equipment Plant and Vehicles Total
and Furnitures Machinery

Cost

Balance as at 1st Shrawan 2079 10,000,000 4,210,339 500,000 1,500,000 16,210,339

Additions - 1,050,145 1,050,145

Revaluation and adjustments - - - - -
Disposals - -

Balance as at 31st Ashad 2080 10,000,000 5,260,484 500,000 1,500,000 17,260,484

Additions 154,520 214,500 369,020

Revaluation and adjustments 5,000,000 (574,912) (61,250) (131,600) 4,232,238
Reclassified to Non current Assets held for sale - - - - -

Balance as at 31st Ashad 2081 15,000,000 4,840,092 438,750 1,582,900 21,861,742

Depreciation and impairment losses

Balance as at 1st Shrawan 2079 - - - - -

Charge for the year - 1,315,121.00 75,000.00 300,000.00 1,690,121
Impairment Losses - - - - -
Disposals - - - - -

Balance as at 31st Ashad 2080 - 1,315,121 75,000 300,000 1,690,121

Charge for the year - 1,024,970.75 63,750.00 282,900.00 1,371,621

Impairment Losses - - - - -
Disposals - - - - -

Balance as at 31st Ashad 2081 - 2,340,092 138,750 582,900 3,061,742

Net book value

As at 1st Shrawan 2079 10,000,000 4,210,339 500,000 1,500,000 16,210,339

As at 31st Ashad 2080 10,000,000 3,945,363 425,000 1,200,000 15,570,363

As at 31st Ashad 2081 15,000,000 2,500,000 300,000 1,000,000 18,800,000

Security (If any)

Vehicles have been provided as a security against Vehicle Loans from Machhapuchchhre Bank Limited. No other items of property, plant and equipment
have been provided as security against loans.

Impairment of Property, Plant and Equipment

No items of Property, Plant and Equipment have been impaired.
The Company has availed the deemed cost exemption in relation to the property, plant and equipment on the date of transition and hence the net block
carrying amount has been considered as the gross block carrying amount on that date. Refer table below for the gross block value and the accumulated
depreciation on 1st Shrawan, 2079 under the previous GAAP.
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Note No: 5
Intangible Assets:
Particulars Computer Software Total
Balance at 1st Shrawan 2079 89,600.01 89,600.01
Additions
Adjustment during the year - -
Balance at 31st Ashadh 2080 89,600.01 89,600.01
Additions
Adjustment during the year - -
Balance at 31st Ashadh 2081 89,600.01 89,600.01
Amortization
Balance at 1st Shrawan 2079
Charge for the year 17,920.00 17,920.00
Adjustment during the year - -
Balance at 31st Ashadh 2080 17,920.00 17,920.00
Charge for the year 17,920.00 17,920.00
Adjustment during the year - -
Balance at 31st Ashadh 2081 35,840.00 35,840.00
At 1st Shrawan 2079 89,600.01 89,600.01
At 31st Ashad 2080 71,680.01 71,680.01
At 31st Ashad 2081 53,760.01 53,760.01

a) The Company has availed the deemed cost exemption in relation to the
property, plant and equipment on the date of transition and hence the net
block carrying amount has been considered as the gross block carrying
amount on that date.
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

6 Financial Asset
Particulars Asset/ (Liability)
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Loans and Advance to staff 2,380,952 2,267,574 -
2,380,952 2,267,574 -
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

7 Investment:
Particulars Asset/ (Liability)
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Listed Share 10,000,000 9,500,000 11,000,000
10,000,000 9,500,000 11,000,000

8 Other Non Current Assets

Particulars Asset/ (Liability)
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Employment Benefit Paid In advance 232,426 -
- 232,426 -
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

9 Deferred Tax Assets and Liabiliies:

Deferred tax is calculated on temporary differences using a tax rate of 25% (FY 2079-80: 25%). Deferred tax assets have been
recognized in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the management
believe it is probable that these assets will be recovered.

As at As at
31st Ashad 2081 31st Ashad 2080
Reconciliation of deferred tax assets/liability net

Opening Balance as at 1st Shrawan (503,933) (1,055,317)

Tax income/(expense) during the period
recognised in profit or loss 415,843 551,384
Tax income/(expense) during the period
recognised in OCI (1,250,000) -

Closing balance as at 31st Ashad (1,338,090) (503,933)

Details of the deferred tax assets, amounts recognized in profit or loss and amounts recognized in other comprehensive income
are as follows:

Particulars Asset/ (Liability)

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Property, plant and equipment 186,415 82,847 103,382
Property, plant and equipment Land (3,125,000) (1,875,000) (1,875,000)
Financial Assets 29,762 58,107 -
Investments - 125,000 (250,000)
Other Non-Current Assets - (58,107) -
Inventories - - -
Biological assets 10,522 (12,447) (46,865)
Trade and other receivables 220,238 - -
Cash and cash equivalents 12,500 (6,250) 31,250
Loans and borrowings (91,942) - -
Employee Benefits 1,419,416 1,181,916 981,916
(1,338,090) (503,933) (1,055,317)

Particulars (Charged)/Credited to Profit or Loss

31st Ashad 2081 31st Ashad 2080
Property, plant and equipment 103,567 (20,534)
Financial Assets (28,345) 58,107
Investments (125,000) 375,000
Other Non-Current Assets 58,107 (58,107)
Inventories - -
Biological assets 22,968 34,419
Trade and other receivables 220,238 -
Cash and cash equivalents 18,750 (37,500)
Loans and borrowings (91,942) -
Employee Benefits 237,500 200,000
415,843 551,384

Particulars (Charged)/Credited to OCI

31st Ashad 2081 31st Ashad 2080
Property, plant and equipment Land (1,250,000) -

(1,250,000) -
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

10 Inventories: As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Finished Goods 39,102,381 40,551,098 32,773,867

Tomato 600,000 600,000 500,000
Construction Material 10,000,000 - -
49,702,381 41,151,098 33,273,867

Bank overdrafts (note 11) are secured against all inventory stocks.

11 Biological Assets As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Tomato Vines 1,500,000 1,500,000 1,200,000

1,500,000 1,500,000 1,200,000

12 Trade and other receivables:

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Sundry Debtors 36,857,896 28,955,559 25,941,143

Less: Provision for Bad Debts 1,000,000 - -
Net Sundry Debtors 35,857,896 28,955,559 25,941,143
Letter of Credit Margin 3,569,286 3,275,886 3,155,904
Advance to Suppliers 4,913,633 4,818,199 4,507,997
Rent Security 366,000 366,000 315,000
Security Deposit (Telephone) 4,500 4,500 2,250
Employment Benefit Paid In advance 119,048 - -
Gross amoun due from customer for contract work 12,500,000 - -
57,330,362 37,420,145 33,922,294

a) The fair values of all the above financial assets are equal to their carrying amounts.
b) Bank overdrafts are secured against all current assets including trade receivables
d) Trade receivables are non-interest bearing and generally have a credit period of 30 days

13 Income Tax (Receivable)/Payable

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Provision for Income Tax Payable 2,114,174 1,512,182 1,521,806
Less: Advance Income Tax
Advance Income Tax 1,000,000 1,400,000 1,332,000
1,114,174 112,182 189,806
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

14 Cash and Cash Equivalents:

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Cash in hand 413,422 646,936 740,037

Cash at Bank 7,858,861 8,385,631 7,644,472
Cash at Bank Foreign Currency 2,700,000 2,775,000 2,625,000

10,972,283 11,807,567 11,009,510

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Cash at banks and on hand

Bank Overdraft*
Cash and cash equivalents - - -

* Bank overdraft loan is grouped as current loans and borrowings (Refer note no. 11)
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

15 Share capital:

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
(a) Authorised Shares

100000 Ordinary shares of Rs. 100 each 10,000,000 10,000,000 10,000,000

(b) Ordinary shares issued 5000000 5000000 5000000

50000 Ordinary shares of Rs. 100 each

(c) Ordinary shares issued and fully paid Ordinary Ordinary

share share capital

As at 1st Shrawan 2078

Share issue and paid up 20,000 2,000,000

As at 31st Ashad 2079 20,000 2,000,000

Share issue - -

31st Ashad 2080 20,000 2,000,000

Share issue -

31st Ashad 2081 20,000 2,000,000

The shares issued by the company are of the same class and there are no rights, preferences or restrictions attached to any of the shares that are different from any other
shares issued by the company. No shares have been reserved for issue under options or under a contract for sale of shares

Reserves:

16 Revaluation Reserve
As at As at
31st Ashad 2081 31st Ashad 2080
As at 1st Shrawan 7,500,000 7,500,000
Addition During the Year 5,000,000 -
Less: Transferred to Profit and
Loss
As at 31st Ashad 12,500,000 7,500,000

17 Retained earnings
As at As at
31st Ashad 2081 31st Ashad 2080
As at 1st Shrawan 14,980,096 12,097,703
Profit for the year 4,461,510 2,882,393
Other comprehensive income (1,250,000) -
Total 18,191,606 14,980,096
Dividend to Share Holders - -
As at 31st Ashad 18,191,606 14,980,096
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

18 Loans and Borrowings:

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Total Loans and Borrowings
Trust Receipt Loan 24,957,890 30,074,205 22,151,000
Bank overdraft 27,000,000 7,000,000 6,624,370
Term Loan 4,866,972 4,543,324 3,531,753
Government Loan 4,132,231

60,957,093 41,617,529 32,307,123

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Non-current loans and borrowings -
Secured

Term Loan 3,266,972 3,343,324 2,531,753

Government Loan 4,132,231 - -

7,399,203 3,343,324 2,531,753

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Current loans and borrowings - Secured

Trust Receipt Loan 24,957,890 30,074,205 22,151,000

Bank overdraft 27,000,000 7,000,000 6,624,370
Term Loan 1,600,000 1,200,000 1,000,000

53,557,890 38,274,205 29,775,370

Term Loan availed from Bank Nepal Limited is secured against current assets including trade receivables and inventories and is subject
to annual renewal.
Bank overdraft loan has been avalied from Bank Nepal Limited against the collateral of hypothecation of current assets including trade
receivables and inventories.
19 Provisions for employee benefits

Total
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Provision for employee benefits
Provision for Gratuity
Provision for Leave benefits
- - -

Non-current
As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Provision for employee benefits
Provision for Gratuity 3,307,089 2,857,089 2,457,089
Provision for Leave benefits 874,785 674,785 524,785
Provision for Medical Allowance 1,495,789 1,195,789 945,789.00
Total non-current 5,677,663 4,727,663 3,927,663

Current As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079
Provision for employee benefits
Provision for Gratuity - - (2,457,089)
Provision for Leave benefits - - (524,785)

Total current - - (2,981,874)

20 Trade and other payables:

As at As at As at
31st Ashad 2081 31st Ashad 2080 1st Shrawan 2079

Sundry Creditors 12,075,720 11,833,035 11,471,907

Accounts Payable 36,688,391 36,049,414 35,959,091
Audit Fee Payable 197,000 197,000 197,000
48,961,112 48,079,449 47,627,997

Trade payables are non-interest bearing and are normally settled on 30

 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

21 Revenue
FY 2080-81 FY 2079-80

Sales 805,528,725 888,697,779

805,528,725 888,697,779

22 Construction Contract Income

FY 2080-81 FY 2079-80

Income from Construction Contract 112,500,000 -

112,500,000 -

23 Grant Income

FY 2080-81 FY 2079-80

Grant from GON in form of Interest Free Loan 1,243,426

1,243,426 -

24 Interest Income
FY 2080-81 FY 2079-80

Interest Income Empoyee Loan 113,379 107,980

Interest income from Debtors 248,685 -
362,064 107,980

25 Other income
FY 2080-81 FY 2079-80

Other Income - 371,346

Change in fair value of tomato vines - -
Change in fair value of Investment 500,000 -
Foreign currency translation gain - 150,000
500,000 521,346

26 Material Consumed Expenses

FY 2080-81 FY 2079-80
Opening Stock 40,551,097.53 32,773,867.32
Add: Purchase 688,205,940.07 786,212,734.82
Less: Closing Stock 39,102,380.80 40,551,097.53
689,654,657 778,435,505

27 Construction Contract Cost

FY 2080-81 FY 2079-80
Opening Stock - -
Construction Contract Cost 100,000,000.00 -
Less: Closing Stock 10,000,000.00 -
90,000,000.00 -
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

28 Employee benefit expenses:

FY 2080-81 FY 2079-80
Salaries, wages and other employee cost 51,076,917 30,447,945
Provident fund
Gratuity 450,000 400,000
Earned Leave 200,000 150,000
Medical allowance 300,000 250,000
Interest free loan to employee 113,378.68 107,979.70
Total Employee Benefit Expenses 52,140,296 31,355,925

29 Finance cost FY 2080-81 FY 2079-80

Bank Commission 412,987 412,845
Interest on debts and borrowings 3,042,992 2,374,852
Interest Expenses Government Loan 375,657 -

3,831,637 2,787,697

30 Selling and distribution expenses

FY 2080-81 FY 2079-80
Advertisement 7,039,095 7,260,754
Sales Incentive /Promotion 8,819,691 8,259,015
Freight Outward 39,288,381 38,203,840
55,147,167 53,723,610

31 Administrative and operating expenses

FY 2080-81 FY 2079-80

Audit Fee 200,000 200,000

Electricity & Water 2,734,397 221,648
Insurance 1,603,441 1,330,620
Office Expenses 3,436,663 3,059,718
Rent Expenses 11,801,940 11,023,476
19,776,441 15,835,463

32 Depreciation and amortisation

FY 2080-81 FY 2079-80
Depreciation on property, plant and equipment 1,371,621 1,690,121
Amortisation and impairment of intangible assets 17,920 17,920
Revaluation decrease of property, plant and equipment 767,762 -
Net foreign exchange differences - -
2,157,303 1,708,041

33 Other Expenses

FY 2080-81 FY 2079-80
Change in Fair Value of Tomato Vines 91,873 137,674
Impairment loss of Tomato 100,000 -
Change in Fair value of Investment - 1,500,000
Foreign Currency Translation Loss 75,000 -
Impairment Loss on Sundry Debtors 1,000,000 -
1,266,873 1,637,674
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR
34 Income tax
FY 2080-81 FY 2079-80

Current tax expense

Current tax on profits for the year 2,114,174 1,512,182
Adjustment for under provision in prior periods - -
Total current tax 2,114,174 1,512,182

Deferred tax expense

Origination and reversal of temporary differences (415,843)
Recognition of previously unrecognized deferred tax assets (551,384)

Total Deferred Tax (415,843) (551,384)

Total Tax Expense 1,698,331 960,798

Reconciliation of tax expense and the accounting profit multiplied by Company’s tax rate for 2078-079 and 2079-80:

FY 2080-81 FY 2079-80

Accounting profit before income tax 6,159,841 3,843,191

Company's statutory income tax rate of
1,539,960.22 960,797.68
25% ( FY 2078-79.: 25%)
Adjustment in respect of credit sales
income recognised at present value by 128,287 -
NFRS for SMEs
Adjustment in respect of Grant income
recognised at Present Value of Loan by (310,856) -
NFRS for SMEs
Adjustment in respect of Interest Free
125,000 -
Loan Received from Government
Adjustment in respect of foreign currency
translation gain as per NFRS for SMEs but
- (37,500)
not treated as income as per Income Tax
Act, 2058
Adjustment in resepct of Interest Income
to be recognised by NFRS for SMEs but
(90,516) (26,995)
not to be included in income as per
Income Tax Act, 2058
Adjustment in respect of change in fair
value of investment recognised by NFRS
(125,000) -
for SMEs but not treated as income as per
Income Tax Act, 2058
Adjustment in respect of Interest on
Government Loan to be recognised as per
93,914 -
NFRS for SMEs but not treated as
expenses as per Income Tax Act, 2058
Adjustment in respect of Depreciation
computed as per NFRS for SMEs and 195,822 (20,534)
Income Tax Act, 2058
Adjustment in respect of employee
benefits allowed on payment basis under 237,500 200,000
Income Tax Act - Other Deduction
Adjusment in respect of Interest Expenses
in Employees loan recognised as per
28,345 26,995
NFRS for SMEs but not treated as
expenses as per Income Tax Act, 2058
Adjustment in respect of Change in Fair
Value recognised as per NFRS for SMEs
22,968 34,419
but not deductible as per Income Tax Act,
2058
Adjustment in respect of change in fair
value of investment recognised by NFRS
- 375,000
for SMEs but not treated as expenses as
per Income Tax Act, 2058
Adjustment in respect of Foreign currency
translation loss as per NFRS for SMEs but
18,750 -
not deductible as per Income Tax Act,
2058
Adjustment in respect of Impairment of
Sundry Debtors as per NFRS for SMEs
250,000 -
but not deductible as per Income Tax Act,
2058
2,114,174 1,512,182

Income tax expense reported in the

2,114,174 1,512,182
statement of profit or loss
 NFRS FOR SMEs PRIVATE LIMITED

Financial Year 2080-081

Notes to the Financial Statements

35 Related Party Disclosures

a.Relationship
b.Those charged with governance
c. Transactions with Key Management Personnel

36 Contingent Liabilities and commitments

A.Bank Guarantee

B. Letter of Credit
 NFRS FOR SMES PRIVATE LIMITED

Statement of Calculation of Tax Liability F.Y. 2080/081

Particulars As per P/L A/C As per I.T Remark

INCOME
Sales Income 805,528,724.94 806,041,872.95 As per PL Statement
Construction Contract Income 112,500,000.00 112,500,000.00 As per PL Statement
Grant Income 1,243,426.00 500,000.00
Interest Income 362,063.88 -
Other Income 500,000.00 -
TOTAL INCOME 920,134,214.82 919,041,872.95

Cost of Trading Stock u/s 15 689,654,656.80 689,654,656.80 As per PL Statement

Interest u/s 14 3,831,636.79 3,455,979.39 As per PL Statement
Repair & Maintenance u/s 16.2 - - Annexure 1
Depreciation & Amortization u/s 19 2,157,303.00 1,374,014.40 Annexure 2
Other Deduction u/s 13 218,330,777.33 216,100,525.65 As per PL Statement
TOTAL EXPENSES 913,974,373.92 910,585,176.24
Income from business 6,159,840.90 8,456,696.71
Loss set up u/s 20.1.kha - -
Assessable Income - 8,456,696.71
Donation U/S 12 - -
Taxable Income - 8,456,696.71
Loss carried forwarded to be set off from next year profit - -
Income Tax @ 25% - 2,114,174.18
Add: Interest u/s
117 - - Annexure 3
118 - - Annexure 3
119 - - Annexure 3
Total Tax 2,114,174.18
Advance Tax (TDS plus Advance) Annexure 3
To Be Paid/(Claimed) 2,114,174.18
 NFRS FOR SMES PRIVATE LIMITED

FIXED ASSETS DETAIL

2078-79 2079-80 2080-81

Pariculars Closing Balance Addition Total Depreciation Rate Depreciation Closing Balance Addition Total Depreciation Rate Depreciation Closing Balance
Land 2,500,000.00 2,500,000.00 0% - 2,500,000.00 2,500,000.00 0% - 2,500,000.00
Furniture & Fixtures 2,918,330.58 1,050,145.00 3,968,475.58 25% 992,118.90 2,976,356.69 2,976,356.69 25% 744,089.17 2,232,267.51
Computer 67,738.54 67,738.54 25% 16,934.64 50,803.91 154,520.00 205,323.91 25% 51,330.98 153,992.93
Office Equipments 1,182,631.33 1,182,631.33 25% 295,657.83 886,973.50 886,973.50 25% 221,743.37 665,230.12
Motors & Vehicles 1,985,451.71 1,985,451.71 20% 397,090.34 1,588,361.37 214,500.00 1,802,861.37 20% 360,572.27 1,442,289.09
Generator 469,714.55 469,714.55 15% 70,457.18 399,257.37 399,257.37 15% 59,888.61 339,368.76
Total 9,123,866.71 1,050,145.00 10,174,011.71 1,772,258.89 8,401,752.82 369,020.00 8,770,772.82 1,437,624.40 7,333,148.42

2078-79 2079-80 2080-81

Pariculars Closing Balance Addition Total Depreciation Rate Depreciation Closing Balance Addition Total Depreciation Rate Depreciation Closing Balance
Software 89,600.01 89,600.01 20% 17,920.00 71,680.01 71,680.01 20% 17,920.00 53,760.01
Total 89,600.01 - 89,600.01 17,920.00 71,680.01 - 71,680.01 17,920.00 53,760.01
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

First time adoption of NFRS for SMEs

Reconciliation of equity as at 1st Shrawan 2079 (date of transition to NFRS)
Local GAAP Adjustments NFRS balance

ASSETS
Non-Current Assets
Property, plant and equipment 9,213,467 6,996,872 16,210,339
Intangible assets - 89,600 89,600
Financial Assets - - -
Investments 10,000,000 1,000,000 11,000,000
Other Non-Current Assets - - -
Deferred tax assets - - -
Total Non-Current Assets 19,213,467 8,086,472 27,299,939
Current assets
Inventories 33,273,867 - 33,273,867
Biological assets 1,012,540 187,460 1,200,000
Trade and other receivables 35,254,294 (1,332,000) 33,922,294
Income tax receivables - -
Cash and cash equivalents 11,134,510 (125,000) 11,009,510
Total current assets 80,675,211 (1,269,540) 79,405,671
Total assets 99,888,677 6,816,932 106,705,610
EQUITY AND LIABILITIES
Equity
Share capital 2,000,000 - 2,000,000
Revaluation Reserve - 7,500,000 7,500,000
Retained earnings 16,431,751 (16,431,751) 12,097,703
Total Equity 18,431,751 (8,931,751) 21,597,703
Liabilities
Non-Current Liabilities
Loans and borrowings 3,531,753 (1,000,000) 2,531,753
Employee Benefits - 3,927,663 3,927,663
Deferred Tax Liabilities - 1,055,317 1,055,317
Total Current Liabilities 3,531,753 3,982,980 7,514,733
Current Liabilities
Loans and borrowings 28,775,370 1,000,000 29,775,370
Trade and other payables 49,149,803 (1,521,806) 47,627,997
Income Tax Liability - 189,806 189,806
Total Current Liabilities 77,925,173 (332,000) 77,593,173
Total Liabilities 81,456,926 3,650,980 85,107,906
Total Equity and Liabilities 99,888,677 6,816,932 106,705,610
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR

First time adoption of NFRS

Reconciliation of equity as at 31st Ashad 2080
Local GAAP Adjustments NFRS balance

ASSETS
Non-Current Assets
Property, plant and equipment 8,473,433 7,096,930 15,570,363
Intangible assets - 71,680 71,680
Financial Assets - 2,267,574 2,267,574
Investments 10,000,000 (500,000) 9,500,000
Other Non-Current Assets - 232,426 232,426
Deferred tax assets - - -
Total Non-Current Assets 18,473,433 9,168,610 27,642,043

Current assets
Inventories 41,151,098 - 41,151,098
Biological assets 1,450,214 49,786 1,500,000
Trade and other receivables 41,320,145 (3,900,000) 37,420,145
Income tax receivables - -
Cash and cash equivalents 11,782,567 25,000 11,807,567
Total current assets 95,704,023 (3,825,214) 91,878,809
Total assets 114,177,456 5,343,396 119,520,852
EQUITY AND LIABILITIES
Equity
Share capital 2,000,000 - 2,000,000
Revaluation Reserve - 7,500,000 7,500,000
Retained earnings 20,968,296 (5,988,200) 14,980,096
Total Equity 22,968,296 1,511,800 24,480,096

Liabilities
Non-Current Liabilities
Loans and borrowings 4,543,324 (1,200,000) 3,343,324
Employee Benefits - 4,727,663 4,727,663
Deferred Tax Liabilities - 503,933 503,933
Total Non-Current Liabilities 4,543,324 4,031,596 8,574,920

Current Liabilities
Loans and borrowings 37,074,205 1,200,000 38,274,205
Trade and other payables 48,079,449 - 48,079,449
Income Tax Liability 1,512,182 (1,400,000) 112,182
Total Current Liabilities 86,665,836 (200,000) 86,465,836
Total Liabilities 91,209,160 3,831,596 95,040,756
Total Equity and Liabilities 114,177,456 5,343,396 119,520,852
 NFRS FOR SMEs PRIVATE LIMITED

Notes to Financial Statements

Figures in NPR
First time adoption of NFRS for SMEs (continued)
Group reconciliation of total comprehensive income for the year ended 31st Ashad 2080

Local GAAP Adjustments NFRS balance

Revenue From Operation 888,697,779 - 888,697,779
Construction Contract Income - - -
Grant Income - -
Interest Income (107,980) 107,980
Other Income 371,346 (150,000) 521,346
Total Income 889,069,125 (257,980) 889,327,105
Material Consumed Expenses 778,435,505 - 778,435,505
Construction Contract Cost - - -
Employee Benefit Expenses 30,447,945 (907,980) 31,355,925
Finance Cost 2,374,852 (412,845) 2,787,697
Selling and Distribution Expenses 53,723,610 - 53,723,610
Administrative Expenses 16,248,308 412,845 15,835,463
Depreciation and Amortisation Expenses 1,790,179 82,138 1,708,041
Other Operating Expenses - (1,637,674) 1,637,674
Profit/(Loss) Before Tax 6,048,727 2,205,536 3,843,191
Income Tax Expense 1,512,182 551,384 960,798
Profit/(Loss) from continuing operations 4,536,545 1,654,152 2,882,393
Profit /(Loss) on Discontinued Operations (Net of tax) -
Net Profit/(Loss) for the year 4,536,545 1,654,152 2,882,393
Other comprehensive Income - - -
Exchange Gain/Loss arising on translation of foreign - - -
operations
Actuarial Gain/(Loss) on defined Employment benefit - - -
Gain/Loss on Revaluation - - -
Total Comprehensive gain/(loss) for the year, net of - - -
tax
DEFERRED TAXATION

2080-81 2079-80 2078-79

Particulars Carrying Amount Tax Base Temporary Tax @25% Carrying Amount Tax Base Temporary Tax @25% Carrying Amount Tax Base Temporary Tax @25%
Difference Remarks Difference Remarks Difference Remarks
Property, plant and equipment 3,800,000 4,545,658 (745,658) (186,415) DTA 5,570,363 5,901,753 (331,390) (82,847) DTA 6,210,339 6,623,867 (413,528) (103,382) DTA
Property, plant and equipment Land 15,000,000 2,500,000 12,500,000 3,125,000 DTL 10,000,000 2,500,000 7,500,000 1,875,000 DTL 10,000,000 2,500,000 7,500,000 1,875,000 DTL
Financial Assets 2,380,952 2,500,000 (119,048) (29,762) DTA 2,267,574 2,500,000 (232,426) (58,107) DTA - - -
Investments 10,000,000 10,000,000 - - 9,500,000 10,000,000 (500,000) (125,000) DTA 11,000,000 10,000,000 1,000,000 250,000 DTL
Other Non-Current Assets - - - - 232,426 - 232,426 58,107 DTL - - -
Inventories 49,702,381 49,702,381 - - 41,151,098 41,151,098 - - 33,273,867 33,273,867 - -
Biological assets 1,500,000 1,542,087 (42,087) (10,522) DTA 1,500,000 1,450,214 49,786 12,447 DTL 1,200,000 1,012,540 187,460 46,865 DTL
Trade and other receivables 57,330,362 58,211,315 (880,952) (220,238) DTA 37,420,145 37,420,145 - - 33,922,294 33,922,294 - -
Cash and cash equivalents 10,972,283 11,022,283 (50,000) (12,500) DTA 11,807,567 11,782,567 25,000 6,250 DTL 11,009,510 11,134,510 (125,000) (31,250) DTA
Loans and borrowings 4,132,231 4,500,000 367,769 91,942 DTL 3,343,324 3,343,324 - - 2,531,753 2,531,753 - -
Employee Benefits 5,677,663 - (5,677,663) (1,419,416) DTA 4,727,663 - (4,727,663) (1,181,916) DTA 3,927,663 - (3,927,663) (981,916) DTA
TOTAL 160,495,873 144,523,724 5,352,360 1,338,090 127,520,159 116,049,100 2,015,733 503,933 113,075,426 100,998,830 4,221,269 1,055,317
DTA/DTL as per GAAP - -
Difference 1,338,090 503,933 1,055,317
Opening Balance 503,933 1,055,317 -
Difference 834,157 (551,384) 1,055,317
PL (415,843) (551,384) (819,683)
OCI 1,250,000 - 1,875,000

Remarks: To be adjusted against retained earnings To be charged to PL & OCI To be charged to PL & OCI
Entry: PL Entry: PL Entry: PL
Deferred Tax Assets Dr 415,843 Deferred Tax Assets 551,384 Deferred Tax Assets Dr 819,683
Deferred Tax Income Cr 415,843 Deferred Tax Income 551,384 Deferred Tax Income Cr 819,683

OCI Entry: OCI

Deferred Tax Expenses Dr 1,250,000 Deferred Tax Expenses Dr 1,875,000
Deferred Tax Liability Cr 1,250,000 Deferred Tax Liability Cr 1,875,000
RECONCILIATION OF RETAINED EARNINGS

Reatained Earnings as on 31 Ashadh 2079:

As per GAAP 16,431,751
Restatements charged to RE
1. Changes in Provision for Gratuity
Previous Balance
Revised Balance (2,457,089)
2. Changes in Provision for Earned Leave
Previous Balance -
Revised Balance (524,785)
3. Changes in Provision for Medical Allowance
Previous Balance
Revised Balance (945,789)
3. Impact of Deferred Taxes
4. Revaluation of PPE as on the date of transition as
deemed cost (413,528)
Furniture Fixtures (145,917)
Computer 10,160
Office Equipments 177,395
Motors & Vehicles (485,452)
Generator 30,285
4. Change in Fair Value 1,187,460
Tomato Vines 187,460
Investment 1,000,000
5. Foreign currency translation loss (125,000)
6. Deferred Tax Recognition (1,055,317)

Restated RE as on 31 Ashadh 2079 12,097,703

RECONCILIATION OF RETAINED EARNINGS

Reatained Earnings as on 31 Ashadh 2080:

As per GAAP 20,968,296

1. Due to Restatements as on 1st Shrawan 2079 (3,278,731)

2. Due to Changes in Net Profit for FY 2079-80 (1,654,152)

2. Due to Changes in OCI for FY 2079-80 -

Restated RE as on 31 Ashadh 2080 16,035,414
 NFRS FOR SMES PRIVATE LIMITED
INCOME YEAR 2080-81

DEPRECIATION EXPENSES AS PER SECTION 19 OF INCOME TAX ACT, 2058

ANNEXURE 2
POOL A B C D E
Office Furniture and TOTAL
Classification Building Equipment Automobiles Other Assets Software
RATE 25% 20% 15% 5 Years
Opening Depreciation Base 0 3,914,134.08 1,588,361.37 399,257.37 71,680.01 5,973,432.83
Addition During the Year
From Shrawan to Poush 0 - -
From Magh to Chaitra 0 - - - -
From Baisakh to Ashad 0 - -
Absorbed Addition during the
year 0 - - - - -
Less: Amount derived from
Disposal - - - - -
Depreciation Base 0 3,914,134.08 1,588,361.37 399,257.37 71,680.01 5,973,432.83
Less: Depreciation U/S 19 0 978,533.52 317,672.27 59,888.61 17,920.00 1,374,014.40
Add: Unabsorbed Addition 0 - - - - -
Add: Unabsorbed Repair and
Improvement Cost - - - - -
Opening Depreciation Base for
2081-082 0 2,935,600.56 1,270,689.10 339,368.76 53,760.01 4,599,418.43