Accounting Policies of Arham Technologies Ltd. Company

Mar 31, 2025

24 SIGNIFICANT ACCOUNTING POLICIES
(I.) Basis of Accounting

1. The financial statements of the company have been prepared in accordance with the generally accepted
accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in
all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read
together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared
on an accrual basis and under the historical cost convention).

2. The Company follows accrual systems of accounting in the preparation of accounts except where otherwise
stated.

(II) Property, Plant and Equipment

The cost of an item of Property, plant and equipment comprises:

i) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates.

ii) any costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.

iii) the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is
located, referred to as decommissioning, restoration and similar liabilities, the obligation for which an enterprise
incurs either when the item is acquired or as a consequence of having used the item during a particular period for
purposes other than to produce inventories during that period.

Subsequent expenditure related to an item of Property, plant and equipment Under the, an enterprise recognizes in
the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when
that cost is incurred if the recognition principle are met.

The gain or loss arising from the derecognition of an item of property, plant and equipment are included in the
statement of profit and loss when the item is derecognized. Gains are not classified as revenue, as defined in AS 9,
Revenue Recognition.

The gain or loss arising from the derecognition of an item of property, plant and equipment should be determined
as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

(III.) Depreciation

Depreciation on an item of Property, plant and equipment are provided by using WDV method based on the useful
life’s of assets as prescribed under schedule II to the companies act 2013

The depreciable amount of an asset is determined after deducting its residual value.

Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary
for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the
earlier of the date that the asset is retired from active use and is held for disposal and the date that the asset is
derecognized. Therefore, depreciation does not cease when the asset becomes idle or is retired from active use
(but not held for disposal) unless the asset is fully depreciated.

(IV.) Revaluation of Fixed Assets

No Revaluation of Fixed Assets has been done the financial Year.

(V.) Lease Transactions

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items
are classified as operating lease. Operating lease payments are recognized as an expense in the profit and loss
account or on a basis, which reflect the time pattern of such payment appropriately.

(VI.) Investment

Investments, which are readily realizable and intended to be held for not more than one year from the date on
which such investments are made, are classified as current investments. All other investments are classified as
long-term investments.

(VII.) Inventories

Inventories are valued at lower of cost or net realizable value. Cost of Finished goods is determined by including
direct materials, labor, other expenses and a proportion of overheads based on normal operating capacity. Cost of
finished goods has been determined on FIFO. Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and to make the sale. Cost of raw materials stores and
spares, are determined of FIFO basis. By products are valued at net realizable value.

(VIII.) Revenue Recognition

Revenue is recognized in accordance with Accounting Standard (AS) 9 - Revenue Recognition. Revenue from the
sale of goods is recognized when significant risks and rewards of ownership are transferred to the buyer, there is
no significant uncertainty regarding the amount of consideration and its ultimate collection. Revenue from
services is recognized as and when services are rendered. Interest income is recognized on a time proportion basis,
and dividend income is recognized when the right to receive payment is established. Sales has been Stated Net of
Tax And Duties.

(IX.) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company
will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of
profit and loss over the periods necessary to match them with the related costs, which they are intended to
compensate. Where the grant relates to an asset, it is reduced from the cost of the asset.

Where the company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In
case a non-monetary asset is given free of cost, it is recognized at a nominal value.

Government grants of the nature of promoters’ contribution are credited to capital reserve and treated as a part of
the shareholders’ funds

(X.) Foreign Currency Transactions

1. Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time
of the transaction

2. Monetary items denominated in foreign currency at the year end and not covered under forward exchange
contracts are translated at the year-end rates.

3. Any income or expense on account of exchange difference between the date of transaction and on settlement
Date or on translation is recognized in the profit and loss account as income or expense except in cases where they
relate to the acquisition of fixed assets in which case, they are adjusted to the carrying cost of such assets.

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Mar 31, 2024

2.1 Summary of significant accounting policies Change in accounting policy (A) Use of Estimates

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

Notes to financial statements for the year ended 31st March, 2024_

a) Property, Plant and Equipment

The cost of an item of Property, plant and equipment comprises:

i) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.

ii) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

iii) the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located, referred to as decommissioning, restoration and similar liabilities, the obligation for which an enterprise incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

Subsequent expenditure related to an item of Property, plant and equipment Under the , an enterprise recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if the recognition principle are met

The gain or loss arising from the derecognition of an item of property, plant and equipment are included in the statement of profit and loss when the item is derecognised .Gains are not classified as revenue, as defined in AS 9, Revenue Recognition.

The gain or loss arising from the derecognition of an item of property, plant and equipment should be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

b) Depreciation

Depreciation on an item of Property, plant and equipment are provided by using WDV method based on the useful lifes of

assets as prescribed under schedule II to the companies act 2013

The depreciable amount of an asset is determined after deducting its residual value.

Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the earlier of the date that the asset is retired from active use and is held for disposal and the date that the asset is derecognised. Therefore, depreciation does not cease when the asset becomes idle or is retired from active use (but not held for disposal) unless the asset is fully depreciated. b) Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of fixed assets are capitalized only with respect to qualifying fixed assets i.e. those which take substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

c) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

Where the company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a nonmonetary asset is given free of cost, it is recognized at a nominal value.

Government grants of the nature of promoters’ contribution are credited to capital reserve and treated as a part of the shareholders’ funds

d) Investments

Investments,which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

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Mar 31, 2023

Significant Accounting Policies

i. Basis of Preparation

These financial statements of the Company have been prepared in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards
notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 2013.

The standalone financial statements have been prepared on accrual basis under the historical cost
convention. The accounting policies are applied consistently to all the periods presented in the
standalone financial statements.

The standalone financial statements are presented in Indian Rupee (INR), the functional currency of
the Company. Items included in the standalone financial statements of the Company are recorded
using the currency of the primary economic environment in which the Company operates (the
‘functional currency’). Foreign currency transactions are translated into the functional currency
using exchange rates at the date of the transaction. Foreign exchange gains and lossesfrom settlement
of these transactions are recognised in the standalone statement of profit and loss. Foreigncurrency
denominated monetary assets and liabilities are translated into functional currency at exchange rates
in effect at the balance sheet date, the gain or loss arising from such translations are recognised in
the standalone statement of profit and loss.

The Company has decided to round off the figures to the nearest lakhs.

The standalone financial statements of the Company for the year ended 31st March, 2023 were
approved for issue in accordance with the resolution of the Board ofDirectors on 25th May, 2023.

ii. Significant of Accounting Policies

The significant accounting policies used in preparation of the standalone financial statements:-

a) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the
Management to make estimates and assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income and expenses during the year.
The Management believes that the estimates used in preparation of the financial statements are
prudent and reasonable. Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognized in the periods in which the results are
known/materialize.

b) Property, Plant & Equipment and Capital Work-in-Progress
• Property, Plant & Equipment

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any. Cost of acquisition or construction of property, plant and
equipment comprises its purchase price including import duties and non-refundable purchase taxes
after deducting trade discounts, rebates and any directly attributable cost of bringing the item to its
working condition for its intended use.

Property, plant and equipment acquired in a business combination are recognised at fair value at the
acquisition date. When parts of an item of property, plant and equipment having significant cost have
different useful lives, then they are accounted for as separate items (major components) of property,
plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised 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. All other repairs and maintenance
cost are charged to the standalone statement of profit and loss during the period in which they are
incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in
the standalone statement of profit and loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet
are disclosed as “Capital work-in-progress".

Depreciation is calculated on pro rata basis on Written Down Value method based on estimated
useful life prescribed under Schedule II of the Companies Act, 2013. Freehold land is not
depreciated.

Assets costing ? 5,000 or less are fully depreciated in the year of purchase.

• Capital work-in-progress

Capital work-in-progress comprises of property, plant and equipment that are not ready for their
intended use at the end of reporting period and are carried at cost comprising direct costs, related
incidental expenses, other directly attributable costs and borrowing costs.

c) Intangible Assets

Intangible assets purchased are initially measured at cost.

The cost of an intangible asset comprises its purchase price including duties and taxes and any costs
directly attributable to making the asset ready for their intended use and net of any trade discounts
and rebates.

The amortization period and the amortization method for finite-life intangible assets is reviewed at
each financial year end and adjusted prospectively, if appropriate. Indefinite-life intangible assets
comprises of trademarks and brands, for which there is no foreseeable limit to the period over which
they are expected to generate net cash inflows. These are considered to have an indefinite life, given
the strength and durability of the brands and the level of marketing support. For indefinite-life
intangible assets, the assessment of indefinite life is reviewed annually to determine whether it
continues, if not, it is impaired or changed prospectively basis revised estimates.

d) Impairment of Assets

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication
that a non-financial asset may be impaired. Indefinite life intangible assets and goodwill are subject
to review for impairment annually or more frequently if events or circumstances indicate that it is
necessary. For the purpose of assessing impairment, the smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows from
other assets or groups of assets is considered as a cash generating unit. Goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the Company''s cash
generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquire are assigned to those units.

If any indication of impairment exists, an estimate of the recoverable amount of the individual
asset/cash generating unit is made. Asset/cash generating unit whose carrying value exceeds their
recoverable amount are written down to the recoverable amount by recognizing the impairment loss
as an expense in the standalone statement of profit and loss.

The impairment loss is allocated first to reduce the carrying amount of goodwill (if any) allocated to
the cash generating unit and then to the other assets of the unit, pro rata based on the carrying amount
of each asset in the unit. Recoverable amount is higher of an asset''s or cash generating unit''s value
in use and its fair value less cost of disposal. Value in use is estimated future cash flows expected to
arise from the continuing use of an asset or cash generating unit and from its disposal at the end of
its useful life discounted to their present value using a post-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are considered. If no such transactions can be
identified, an appropriate valuation model is used.

Assessment is also done at each Balance Sheet date as to whether there is any indication that an
impairment loss recognised for an asset in prior accounting periods may no longer exist or may have
decreased. Basis the assessment a reversal of an impairment loss for an asset other than goodwill is
recognised in the standalone statement of profit and loss.

No impairment was identified in FY 2022-23 (FY 2021-22: Nil).

e) Income Taxes

Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the
standalone statement of profit and loss except to the extent it relates to a business combination or to
an item which is recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable/receivable on the taxable income/loss for the year using
applicable tax rates for the relevant period, and any adjustment to taxes in respect of previous years.
Interest expenses and penalties, if any, related to income tax are included in finance cost and other
expenses respectively. Interest Income, if any, related to income tax is included in other income.

Deferred tax is recognised in respect of temporary differences between the carrying amount of assets
and liabilities for financial reporting purposes and the corresponding amounts used for taxation
purposes.

A deferred tax liability is recognised based on the expected manner of realisation or settlement of
the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the
end of the reporting period. Deferred tax assets are recognised only to the extent that it is probable
that future taxable profits will be available against which the asset can be utilised. Deferred tax assets
are reviewed at each reporting date and reduced to the extent that it is no longer probable that the
related tax benefit will be realised.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set
off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to

set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred
tax liabilities relate to income taxes levied by the same taxation authority.

f) Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realizable value after providing
for obsolescence and other losses, where considered necessary. Cost is computed on a weighted
average basis.

Cost of raw materials and stores and spares includes cost of purchase and other costs incurred in
bringing the inventories to their present location and condition. The aforesaid items are valued at net
realisable value if the finished products in which they are to be incorporated are expected to be sold
at a loss.

Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and
other costs incurred in bringing the inventories to their present location and condition. The net
realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and estimated costs necessary to make the sale.

Finished goods includes good purchased for re-sale, as both are stocked together.

g) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term
balances (with an original maturity of three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value

h) Provisions

Provisions are recognised 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. Provisions are measured at the best estimate of the expenditure required to settle the
present obligation at the Balance Sheet date.

If the effect of the time value of money is material, provisions are discounted to reflect its present
value using a current pre-tax rate that reflects the current market assessment of the time value of
money and the risks specific to the obligation. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
If it is no longer probable that the outflow of resources would be required to settle the obligation, the
provision is reversed.

The provisions for indirect taxes and legal matters comprises of numerous separate cases that arise
in the ordinary course of business. These provisions have not been discounted as it is not practicable
for the Company to estimate the timing of the provision utilisation and cash outflows, if any, pending
resolution.