Accounting Policies of Chiraharit Ltd. Company

Mar 31, 2025

Significant Accounting Policies

The company has applied following accounting policies consistently

2.1 Basis of preparation of Financial Statements: -

The Financial Statements are prepared in accordance with Indian Generally
Accepted Accounting Principles (GAAP) under the historical cost convention on
accrual basis. GAAP comprises mandatory accounting standards as prescribed
under section 133 of the Companies Act, 2013 (The Act’) read with rule 7 of the
Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified).
The accounting policies have been consistently applied by the Company and are
consistent with those used in the previous year.

2.2 Current and Non-Current Classification: -

All assets and liabilities have been classified as current or non-current as per the
Company’s normal operating cycle (not exceeding twelve months) and other criteria
set out in the Schedule III to the Act

2.3 Functionality and presentation currency: -

These financial statements are presented in Indian National Rupee (TNR’), which is
the Company’s functional and presentation currency. All Amounts have been
rounded to the nearest rupee, unless otherwise indicated.

2.4 Use of Judgements and Estimates: -

In preparing these financial statements, management has made judgements,
estimates and assumptions that affect the application of the company’s accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Management believes tfiat the estimates used in the preparation of the financial

statements are prudent and reasonable. Actual results may differ from these
estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to estimates are recognized prospectively.

• Judgements

Information about the judgements made in applying accounting policies that
have the most significant effects on the amounts recognized in the financial
statements have been given below: -

Classification of financial assets: assessment of business model within which
the assets are held.

• Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment in the financial statements
for every period ended is included below: -

- Recognition of deferred tax assets: availability of future taxable profit against
which carry-forward tax losses can be used;

- Impairment test: key assumptions underlying recoverable amounts.

Recognition and measurement of provisions and contingencies: key
assumptions about the likelihood and magnitude of an outflow of resources.

2.5 Property Plant & Equipment.

Fixed Assets are stated at actual cost, less accumulated depreciation and
impairment, if any. The actual cost capitalized comprises material cost, inward
freight, installation cost, duties and taxes and other incidental expenses incurred
to acquire/construct/install the assets.

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.

All other repairs and maintenance are charged to the Statement of Profit and Loss
during the reporting period in which they are incurred.

The cost and the accumulated depreciation for fixed assets old, retired or otherwise
disposed off are removed from the stated values and the resulting gains and losses
are included in the Statement of Profit and loss.

Company depreciates its property plant and equipment on the Written down value
method.

Leasehold land is amortized over the period of lease. Leasehold improvements are
amortized over the period of lease or estimated useful life, whichever is lower.

The company believes that useful life of assets is same as those prescribed in
schedule II of the act, expect for the below assets based on technical evaluation,
useful life has been estimated to be different from that prescribed in schedule II of
the act.

Buildings	30 Years
Office Equipment	5 Years
Plant & Machinery	15 Years
Computers	3 Years
Vehicles	8 Years
Furniture & Fixtures	10 Years

The residual values are not more than 5% of the original cost of the asset.

The assets residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.

In case of pre-owned assets, the useful life is estimated on a case-to-case basis.

Depreciation on additions / deletions is calculated pro-rata from the month of such
addition / deletion, as the case maybe Gains and losses on disposals are
determined by comparing proceeds with carrying amount.

2.7 Inventories

Inventories of Raw Materials, Work-in-Progress, Stores and spares, Finished Goods,
a Stock-in-trade and Property under development are stated ''at cost or net
realizable value, whichever is lower''. Goods-in-Transit are stated ''at cost''. Cost
comprises all cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition. Cost formulae used
are ¹ First-in-First-out'', ''Weighted Average cost'' or ''Specific identification'', as
applicable. Due allowance is estimated and made for defective and obsolete items,
wherever necessary.

2.8 Revenue Recognition

The Company recognizes revenue from sale of goods when;

i) effective control of goods along with the significant risks and rewards of
ownership has been transferred to buyer;

ii) the amount of revenue can be measured reliably;

iii) it is probable that the economic benefits associated with the transaction will
flow to the Com^paoy; and

iv) the costs incurred or to be incurred in respect of the transaction can be
measured reliably.

Revenue (other than sale of goods) is recognized to the extent that it is probable
that the economic benefits will flow to the company and the revenue can be reliably
measured.

Revenue represents net value of goods provided to customers after deducting for
certain incentives including, but not limited to discounts, volume rebates, incentive
programs etc.

Revenue is recognized as unbilled revenue when the company has substantively
completed its performance obligations, specifically when the effective ownership
and all significant risks and rewards related to the goods have been transferred to
the customer. The delay in the billing is solely attributable to specific conditions
stipulated within the purchase order, such as a requirement for final acceptance,
phased delivery completion, or the attainment of a certain project milestone. This
accounting treatment correctly reflects revenue that has been earned but not yet
formally invoiced

Interest income are recognized on an accrual basis using the effective interest
method.

Dividends are recognized at the time the right to receive paj''ment is established.

2.9 Employee Benefits

• Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are
expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognized in respect of
employees’ services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled.

• Defined Contribution Plans

Defined Contribution Plans such as Provident Fund (PF), Employee State
Insurance (ESI) etc., are charged to the Statement of Profit and Loss as
incurred.

• Termination Benefits

Termination benefits are payable when employment is terminated by the
Company before the normal retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits. The Company recognizes
termination benefits at the earlier of the following dates: (a) when the Company
can no longer withdraw the offer of those benefits; when the Company
recognizes costs for a restructuring that is within the scope of Accounting
Standards and involves the payment of terminations benefits. In the case of an
offer made to encourage voluntary redundancy, the termination benefits are
measured based on the number of employees expected to accept the offer.
Benefits falling due more than 12 months after the end of the reporting period
are discounted to present value.

Income tax expense comprises current and deferred tax. It is recognized in the

statement of profit or

loss.

• Current tax

Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or receivable
in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax assets and liabilities are
offset only if, the Company:

a) Has a legally enforceable right to set off the recognized amounts; and

b} Intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.

• Deferred tax

Deferred tax is recognized on differences between the carrying amounts of assets
and liabilities in the balance sheet and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognized for
all taxable temporary differences. Deferred tax assets are generally recognized
for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary
differences can be utilized. Such assets and liabilities are not recognised if the
temporary difference arises from initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and liabilities
in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date 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 assets and liabilities 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 balance sheet date.

Minimum Alternative Tax (MAT) is recognized as an asset only when and to the
extent there is convincing evidence that the Company will pay normal income
tax during the specified period. In the year in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the recommendations
contained in guidance note issued by the Institute of Chartered Accountants of
India, the said asset is created by way of credit to the consolidated statement of
profit and loss and included in deferred tax assets. The Company reviews the
same at each balance sheet date and writes down the Scarrying amount of MAT
entitlement to the extent there is no longer convincing evidence to the effect that
Company will pay normal income tax during the specified period.

Basic earnings per share is calculated by dividing: - the profit attributable to
owners of the Company - by the weighted average number of equity shares
outstanding during the financial year, adjusted for bonus elements in equity shares
issued during the year and excluding treasury shares.