Accounting Policies of Novateor Research Laboratories Ltd. Company

Mar 31, 2025

Note No.: 1I. General information:

NOVATEOR RESEARCH LABORATORIES LTD (the ''Company'') is a Public Limited Company, domiciled in India with its registered office located at B - 1026 - DEV ATELIER, NR. ANAND NAGAR CIRCLE, OPP. DEV AURUM, PRAHLAD NAGAR, Ahmedabad, Gujarat -380015, SATELLITE, PIN: 380015. The Registration Number of the Company is L24230GJ2011PLC064731. The Company is engaged in the business of Our Company was originally incorporated as Novateor Research Laboratories Private Limited on April 01, 2011 under the Companies Act, 1956 vide certificate of incorporation issued by the Registrar of Companies, Gujarat. Subsequently, the company was converted into Limited and name of the company was changed from "Novateor Research Laboratories Private Limited" to "Novateor Research Laboratories Limited" under the Companies Act, 2013 pursuant to a special resolution passed by our shareholders at the EGM held on April 12, 2019 and had obtained fresh certificate of incorporation dated April 22, 2019 issued by the Registrar of Companies, Gujarat. The CIN of the Company L24230GJ2011PLCO64731.

Our company is promoted by Mr. Navdeep S Mehta and Mrs. Tejal N Mehta; Our individual promoters manage and control the major affairs of our business operations. Through their combined l0 plus years of experience, industry knowledge and understanding, our company has a competitive advantage over our competitors which enables us to expand our geographical and customer presence in existing as well as target markets, while exploring new growth avenues. The company came up with an Initial Public Offer which has got listed on the BSE SME Platform on 13.09.2019 with ISIN INE08JY01013 and trading ID 542771.

II. Significant Accounting Policies Current versus non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/ non-current classification. An asset is classified as current when it is:

• Expected to be realized or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realized within twelve months after the reporting period, or

•Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is classified as current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

•There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

The company has identified 12 months as its operating cycle.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Basis of Preparation of Financial Statements

"The financial statement are prepared and presented under the historical cost convention and evaluated on a going-concern basis using the accrual system of accounting in accordance with the accounting principles generally accepted in India (lndian GAAP) and the requirements of the notified sections, schedules and rules of the Companies Act 2013 including the Accounting Standards as prescribed by the Companies (Accounting Standards) Rules,2006 as per section 211 (3C) of the Companies Act, 1956 (which are deemed to be applicable as Section 133 of the Companies Act, 2013 ("tire Act") read with Rule 7 of Companies (Accounts) Rules,2014)."

The presentation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and Liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which results are known/materialized.

Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

Property, Plant & Equipment

Property, Plant & Equipment including intangible assets are stated at their original cost of acquisition including taxes, freight and other incidental expenses related to acquisition and installation of the concerned assets less depreciation till date.

Company has adopted cost model for all class of items of Property Plant and Equipment.

Immovable property being Land is revalued by independent professional valuers on a triennial basis and whenever their carrying amounts are likely to differ materially from their revalued amounts. When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset.

Increases in carrying amounts arising from revaluation, including currency translation differences, are recognised in the asset Value, unless they offset previous decreases in the carrying amounts of the same asset, in which case, they are recognised in profit or loss. Decreases in carrying amounts that offset previous increases of the same asset are recognized against the asset revaluation reserve. All other decreases in carrying amounts are recognised as a loss in the statement of Profit & Loss. As the revaluation of land has been undertaken there arises no need to provide Depreciation and hence the value of asset has been shown at historical cost plus revaluation value.

Depreciation

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. All fixed assets individually costing Rs. 5000/- or less are fully depreciated in the year of installation/purchase. Depreciation on assets acquired/sold during the year is recognised on a pro-rata basis to the statement of profit and loss till the date of acquisition/sale.

Impairment of Assets

The carrying amounts of property, plant & equipment are reviewed at each balance sheet date to determine, if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of the property, plant & equipment exceeds its recoverable amount which represents greater of the "net selling price" and "value in use" of the respective assets. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

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 noncurrent 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 diminutions 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.

Inventories

Items of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present location and condition, Cost of raw materials, process chemicals, stores and spare, packing materials, trading and other products are determined on weighted average basis By- Products are valued at net realizable value. The closing stock as on the balance sheet date is as certified by the directors of the company.

Trade Receivables and Loans and Advances

Trade Receivables and Loans and Advances are presented after making adequate provision for any shortfall in their recovery. The provision and any subsequent recovery is recognised in the Profit and Loss statement. Bad debts are written off when they are identified.

Cash and cash equivalents

All highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase are considered to be cash equivalents.

Provisions and Contingent Liabilities

A Provision is recognised when the entity has a present obligation as a result of past event and it is probable that an outflow of resources will be required 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.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. A Contingent asset is neither recognised nor disclosed.

Revenue Recognition

• Sales are recognized when goods are supplied. Sales are net of trade discounts and rebates. It does not include interdivisional sales.

• Revenue in respect of other items is recognized when no significant uncertainty as to its determination or realization exists.

• Other Income: Dividend income on investments is recognized when the right to receive dividend is established. Interest Income is recognised on time proportionate basis.

Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of the qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended uses or sale. All other borrowing costs are charged to revenue in the year of incurrence.

Taxes on Income

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company.

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the Year. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balancesheet date.

In case the Company is liable to pay income tax under provision of Minimum Alternate Tax r-r/s. 115J8 of Income Tax Act, 1961, the amount of tax paid in excess of normal income tax liability is recognized as an asset only if there is convincing evidence for realization of such asset during the specified period. MAT Credit Entitlement is recognized in accordance with the Guidance Note on accounting treatment in respect of Minimum Alternate Tax (MAT) issued by The Institute of Chartered Accountants of India.

Earnings per Share

In determining earnings per share, the Company considers the net profit after tax attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of equity shares outstanding during the year. The number of equity shares used in computing diluted earnings per share comprises weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Segment Reporting

As the Company''s principle business activities fall within the single segment, the disclosure requirement of Accounting Standard l7 on Segment Reporting prescribed u/s 133 of the Companies Act, 2013 (''The Act") read with Rule 7 of the Companies (Accounts) Rule, 2014 is not applicable.

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Mar 31, 2024

II. Significant Accounting Policies

Basis of Preparation of Financial Statements

"The financial statement are prepared and presented under the historical cost convention and evaluated on a going-concern
basis using the accrual system of accounting in accordance with the accounting principles generally accepted in India (lndian
GAAP) and the requirements of the notified sections, schedules and rules of the Companies Act 2013 including the Accounting
Standards as prescribed by the Companies (Accounting Standards) Rules,2006 as per section 211 (3C) of the Companies Act, 1956
(which are deemed to be applicable as Section 133 of the Companies Act, 2013 ("tire Act") read with Rule 7 of Companies
(Accounts) Rules,2014)."

The presentation of financial statements requires estimates and assumption to be made that affect the reported amount of
assets and Liabilities on the date of financial statements and the reported amount of revenue and expenses during the
reporting period. Difference between the actual result and estimates are recognized in the period in which results are
known/materialized.

Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
Accounting estimates and assumptions that have a significant effect on the amounts reported in the financial statements
include:

i) Net Realisable value of items of Inventories

ii) Useful life and Residual value of Property, Plant and Equipment and Intangible Assets

iii) Defined Benefit obligations

iv) Deferred Tax asset or liability

v) Provisions for Trade Receivables

vi) Other Provisions and Contingencies

Property, Plant & Equipment

Property, Plant & Equipment including intangible assets are stated at their original cost of acquisition including taxes, freight
and other incidental expenses related to acquisition and installation of the concerned assets less depreciation till date.

Company has adopted cost model for all class of items of Property Plant and Equipment.

Immovable property being Land is revalued by independent professional valuers on a triennial basis and whenever their carrying
amounts are likely to differ materially from their revalued amounts. When an asset is revalued, any accumulated depreciation
at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the
revalued amount of the asset.

Increases in carrying amounts arising from revaluation, including currency translation differences, are recognised in the asset
Value, unless they offset previous decreases in the carrying amounts of the same asset, in which case, they are recognised in
profit or loss. Decreases in carrying amounts that offset previous increases of the same asset are recognized against the asset
revaluation reserve. All other decreases in carrying amounts are recognised as a loss in the statement of Profit & Loss. As the

revaluation of land has been undertaken there arises no need to provide Depreciation and hence the value of asset has been
shown at historical cost plus revaluation value.

Depreciation

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. All fixed
assets individually costing Rs. 5000/- or less are fully depreciated in the year of installation/purchase. Depreciation on assets
acquired/sold during the year is recognised on a pro-rata basis to the statement of profit and loss till the date of acquisition/sale.

Impairment of Assets

The carrying amounts of property, plant & equipment are reviewed at each balance sheet date to determine, if there is any
indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of
the property, plant & equipment exceeds its recoverable amount which represents greater of the "net selling price" and "value
in use" of the respective assets. The impairment loss recognized in prior accounting period is reversed if there has been an
improvement in recoverable amount.

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 non-current
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 diminutions 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.

Inventories

Items of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of
inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in
bringing them to their respective present location and condition, Cost of raw materials, process chemicals, stores and spare,
packing materials, trading and other products are determined on weighted average basis By- Products are valued at net
realizable value. The closing stock as on the balance sheet date is as certified by the directors of the company.

Trade Receivables and Loans and Advances

Trade Receivables and Loans and Advances are presented after making adequate provision for any shortfall in their recovery.
The provision and any subsequent recovery is recognised in the Profit and Loss statement. Bad debts are written off when they
are identified.

Cash and cash equivalents

All highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an
insignificant risk of change in value and having original maturities of three months or less from the date of purchase are
considered to be cash equivalents.