Accounting Policies of Fabtech Technologies Cleanrooms Ltd. Company

Mar 31, 2025

2 Significant accounting policies:

(i) Basis of accounting:

The 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 specified under Section 133 of the Companies Act, 2013,
and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”), as applicable. The financial statements have been
prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the
financial statements are consistent with those followed in the previous year.

(ii) Use of estimates:

The presentation of the financial statements in conformity with the Indian GAAP requires the Management to make estimates
and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent
liabilities. The Management believes that the estimates used in preparation of Financial Statements are prudent and reasonable.
Future results could differ due to these estimates and differences between the actual results and estimates are recognised in the
period in which the results are known / materialise.

(iii) Revenue recognition:

Revenue from sales is recognised when the significant risks and rewards of ownership of the goods are transferred to the
customers. Sales are net of sales returns and trade discounts. Installation and commissioning income is recognised when the
service is rendered. Interest income is recognised on a time proportion basis. Dividend income is accounted when the right to
receive the same is established.

Amounts included in the financial statements, which relate to recoverable costs & accrued margins, if any, not yet billed on
contracts are classified as "Unbilled Revenue."

(iv) Export Incentive:

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the
same.

(v) Property, plant & equipment and depreciation:

All Property, plant & equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if any.
Cost comprises of the purchase price and any other attributable cost of bringing the assets to its working condition for its
intended use.

Depreciation on property, plant & equipment has been provided using the straight line method in the manner and at the rates
prescribed by Schedule II of the Act. Depreciation on addition/deletion of Property, plant & equipment made during the year is
provided on pro-rata basis from / upto the date of each addition / deletion.

Individual assets costing less than Rs 5,000 are depreciated fully in the year of purchase.

(vi) Capital work-in-progress:

Projects under which tangible assets are not yet ready for their intended use are carried at cost, comprising direct cost, related
incidental expenses and attributable interest (if any).

(vii) Borrowing costs:

Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset
is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

(viii) Impairment:

The carrying amount of fixed assets are reviewed at each Balance Sheet date if there is any indication of impairment based on
internal / external factors. Impairment loss is provided to the extent the carrying amount of such assets exceed their recoverable
amount. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of
estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful
life. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable,
willing parties, less the cost of disposal.

(ix) Investments:

Long term investments are stated at cost and provision for diminution in value is made to recognise a decline other than
temporary. Current investments are stated at cost or fair value, whichever is lower.

(x) Inventories:

Inventories are valued at the lower of cost and net realisable value.

The cost is determined as follows:

(a) Raw and packing materials: FIFO method

(b) Work-in-progress: At material cost absorbed on weighted average cost basis and production overheads

(c) Finished goods : At material cost absorbed on weighted average cost basis and production overheads.

(d) Stock-in-trade : FIFO method

(xi) Employee benefits:

(I) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss
in the year in which the related service is rendered.

(II) Long term benefits:

a. Defined Contribution Plan
Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and
family pension fund, in which both employees and the Company make monthly contribution at a specified percentage
of the employees’ eligible salary (currently 12% of employees'' eligible salary subject to a minimum contribution of
''780 per month). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and
Family Pension Fund are classified as Defined contribution plans as the Company has no further obligations beyond
making the contribution. The Company''s contribution to Defined Contribution Plans are charged to the statement
of profit and loss, as incurred.

b. Defined Benefit Plan
Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The
plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination
of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs
upon completion of five years of service. The Company accounts for gratuity benefits payable in future based on an
independent actuarial valuation as at the Balance Sheet date, using the projected unit credit method. Actuarial gains
and losses are recognised in the statement of profit and loss.

Compensated absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are
entitled to accumulate leave subject to certain limits, for future encashment / availment. The liability is provided
based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial
valuation as at the Balance Sheet date, using the projected unit credit method. Actuarial gains and losses are
recognised in the statement of profit and loss.

(xii) Foreign currency transactions and translations:

(a) Foreign currency transactions are recorded at the exchange rates that approximates the actual rate at the date of the
transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realisation.
Monetary items denominated in foreign currency as at the balance sheet date are converted at the exchange rates prevailing
on that date. Exchange differences are recognised in the statement of profit and loss.

(b) The Company holds derivative financial instruments such as foreign exchange forward contracts and option contracts to
mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities and forecasted cash flows
denominated in foreign currencies. The counterparty for these contracts is generally a bank or financial services company.
The Company regularly reviews its foreign exchange forward.

(c) Forward foreign exchange contracts outstanding as at the Balance Sheet date are converted at the exchange rates prevailing
on that date. Exchange differences are recognised in the statement of profit and loss.

(xiii) Taxation:

Tax expense comprises current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities
in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against
which such deferred tax assets can be realised.