Pusparaj Trade And Suppliers
Punarbas, Kanchanpur
Significant Accounting Policies and Notes to Accounts
For the Year Ended 32nd Ashadh 2082 (16th July 2025)
1. General information
The Pusparaj Trade and Suppliers is a sole proprietorship firm under the provisions of the Private Firm Registration
Act,2014 having its registered office at Kathmandu, Nepal. The Firm is registered with IRD with PAN No. 603436244
The objective of the firm is to procure paddy and wheat directly from farmers and supply them to retailers and wholesalers.
2. Significant Accounting Policies
2.1 Basis of preparation and accounting policies
2.1.1 Transition to NAS for MEs
The Firm has adopted NAS for MEs for the first time for the financial year ended 32nd Ashadh, 2082. In the previous financial
years, the income tax returns were filed under the self-assessment return system (D-01). As per applicable provisions,
preparation of financial statements was not required for those periods.
2.1.2 Statement of Compliance
These financial statements have been prepared in accordance with Nepal Accounting Standard for Micro Entities (NAS for
MEs).
2.1.3 Basis of Measurement
The financial statements have been prepared on the historical cost basis except investments held-for-trade is measured at
fair value.
2.1.4 Critical Accounting Estimates
The preparation of the financial statements in conformity with Nepal Accounting Standards for Micro Entities (NAS for MEs)
requires the use of certain critical accounting estimates and judgements. The Firm makes certain estimates and assumptions
regarding the future events. In the future, actual result may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are to be disclosed.
2.1.5. Functional and Presentation Currency
The financial statements are prepared in Nepalese Rupees, which is the Firm's functional currency. All the financial
information presented in Nepalese Rupees has been rounded to the nearest rupee, except otherwise indicated.
2.2 Accounting Policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have
been consistently applied to all the years presented, unless otherwise stated.
2.2.1 Impairment of non-financial assets (excluding inventories)
Non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, the asset is
written down accordingly.
Impairment charges are included in profit or loss.
2.2.2. Property, plant and equipment
Items of property, plant and equipment are initially recognized at cost. Cost includes the purchase price and other directly
attributable costs. Subsequently, items of property, plant and equipment are measured at cost less depreciation less
impairment.
Pusparaj Trade And Suppliers
Punarbas, Kanchanpur
Significant Accounting Policies and Notes to Accounts
For the Year Ended 32nd Ashadh 2082 (16th July 2025)
2.2.3. Depreciation
Freehold land is not depreciated. Depreciation on assets under construction does not commence until they are complete and
available for use. Depreciation is provided on all other items of property, plant and equipment so as to write-off their
carrying value over the expected useful economic lives.
Depreciation has been computed on WDV method as per the rates prescribed below:
Particulars Rate (%)
Building and Structures 5
Office Equipments 25
Furniture and Fixtures 25
Vehicles 20
Plant and Machineries 15
2.2.4. Trade and other receivables
Trade and other receivables are stated at their cost less provision for impairment. The amount of the provision is recognized
in the income statement.
2.2.5. Inventories
Inventories are initially recognized at cost, and subsequently at the lower of cost and net realizable value.
The cost is determined on first-out-first (FIFO) method or weighted average method and included expenditure incurred in
acquiring the inventories and bringing them to their present location and condition. In the case of manufactured inventories
and work-in-progress, cost includes direct material and labor cost and it does not include overheads which is charged to the
statement of income in the period in which it is incurred.
2.2.6. Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and other short term highly liquid investments. Bank
overdrafts that are repayable on demand and form and integral part of the Firm's cash management are included within
borrowings in current liabilities on the balance sheet.
2.2.7. Borrowing costs
Interest bearing borrowings are recognized initially at cost, net of attributable transaction costs. Subsequent to initial
recognition, interest bearing borrowings are stated at amortized cost. Borrowing costs are charged to the income statement
in the period in which it is incurred.
2.2.8. Retirement Benefits
Defined contribution schemes
Benefits payable on contribution scheme is measured and recognized as expenses at the amount that needs to be contributed
(Whether or not actually contributed; i.e., on accrual basis) by the Firm during the reporting period.
Defined benefit schemes
Benefits payable for defined benefit scheme is measured and recognized as a liability at the amount that would be payable at
the end of the reporting period, if the employees leave on that date. Employees who have not completed the minimum period
of services to be entitled to the retirement benefit at the end of the reporting period are not considered in the measurement
of the liability.
Pusparaj Trade And Suppliers
Punarbas, Kanchanpur
Significant Accounting Policies and Notes to Accounts
For the Year Ended 32nd Ashadh 2082 (16th July 2025)
2.2.9. Taxation
Income tax is the expected tax payable on the taxable income for the year using tax rate at the balance sheet date and any
adjustment to tax payable in respect of previous years.
Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay
the related dividend.
2.2.10. Trade and other payables
Trade and other payables are stated at their cost.
2.2.11. Provisions
The provisions for liabilities of uncertain timing or amount include those for warranty claims, leasehold dilapidations and
legal disputes. The provision is measured at the best estimate of the expenditure required to settle the obligation at the
reporting date.
2.2.12. Income
Revenue
Revenue for the sale of goods or services is recognized when the Firm has transferred the significant risks and rewards of
ownership to the buyer and it is probable that the Firm will receive the previously agreed upon payment.
Interest income
Interest income are recognized in the statement of income using the effective interest method.
2.2.13. Expenses
Interest
Interest expenses are recognized in the statement of income using accrual method.
2.2.14. Related Parties Transaction
All Services with related parties are carried out by the Firm at arm's length prices.