Accounting Policies of Phoenix Overseas Ltd. Company

Mar 31, 2025

SIGNIFICANT ACCOUNTING POLICIES

i) BASIS OF ACCOUNTING

The financial statements have been prepared on a going concern basis under the historical cost convention, in accordance, in material respects, with the generally accepted accounting principles in India), the applicable Accounting Standards under sec 133 of the Companies Act, 2013, read with para 7 of the Companies (Accounts) Rules 2014 (as amended) and the relevant provisions of the Companies Act 2013("the 2013 Act") as applicable. The Company follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. Where it is not possible to determine the quantum of accrual with reasonable certainty e.g. insurance and other claims, refund of custom/excise duty etc., these continue to be accounted for on settlement basis.

ii) USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates and difference between actual results and estimates are recognized in the period in which the results are known/materialize.

iii) VALUATION OF INVENTORIES (AS-2)

Goods are valued at cost applying the FIFO Method of Inventory Valuation.

iv) DEPRECIATION (AS-10)

Depreciation on fixed assets has been provided on SLM method on Prorata basis over the useful life prescribed in schedule II to the Companies Act, 2013 after considering salvage value of five percent of original cost. The Company has considered useful life of assets same as prescribed under the Companies Act, 2013.

v) REVENUE RECOGNITION (AS-9)

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

vi) FIXED ASSETS (AS-10 & 12)

Fixed assets are stated at cost of acquisition, net of tax/duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use; less accumulated depreciation. Government Subsidies directly related with an asset is reduced from the cost of the asset as per stipulations of AS-12.

vii) FOREIGN CURRENCY TRANSACTION (AS-11)

a) The reporting currency of the Company is the Indian Rupee.

b) Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate predetermined on the basis of the agreed rate with the banker backed by forward contract. At each balance sheet date, foreign currency monetary items are reported using the exchange rate predetermined on the basis of the agreed rate with the banker backed by forward contract. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

viii) INVESTMENTS (AS-13)

Investments are stated at cost. No provision is made for Diminution in the value of investments, if any, since the same is considered by Board as temporary, while investments are of long-term in nature.

ix) EMPLOYEE BENEFITS (AS-15)

a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

ii) Defined Benefit Plan - The Company is in the process of finalizing an agency for managing the gratuity fund and ascertaining the liability on the basis of actuarial valuation. Pending finalization of the same liability for previous and current year has been provided on the basis of Company''s internal estimates.

b) Short term employment benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees renders the services. These benefits include compensated absence also.

x) BORROWING COST (AS-16)

Borrowing costs attributable to acquisitions and construction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit & Loss Account.

xi) EARNING PER SHARE (AS-20)

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard (AS)-20 on "Earning Per Share". The basic EPS is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

xii) TAXES ON INCOME (AS-22)

Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent period. Deferred Tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

xiii) IMPAIRMENT OF ASSETS (AS-28)

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

xiv) SALES

a) Export sale is accounted for at the time of clearance of the goods at the Indian Customs Stations.

b) Profit from sale of Import Licence and other incentives is recognized after confirmation of realization of the proceeds.

xv) SEGMENTS ACCOUNTING

a) Segment Assets and Liabilities

Segment assets include all operating assets used by a segment and consists principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the Balance Sheet. Segment liabilities include all operating liabilities and consists principally of creditors and accrued liabilities. Segment assets and liabilities do not include deferred income taxes, share capital, reserves, loans, investments, miscellaneous expenditure and profit and loss appropriation account. While most of the assets/liabilities can be directly attributed to the individual segments, the carrying amounts of certain assets/liabilities pertaining to both segments are allocated to the segments on a reasonable basis.

b) Segment Revenue & Expenses

All segment revenues and expenses are directly attributable to the segments.

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event,

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

a) A present obligation arising from events, when it is not probable that an outflow of resources will be required to settle the obligation,

b) A present obligation when no reliable estimate is possible; and

c) A present obligation arising from past events where the probability of outflow of resources is not remote. Contingent Assets are neither recognized, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

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Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

i) BASIS OF ACCOUNTING

The financial statements have been prepared on a going concern basis under the historical
cost convention, in accordance, in material respects, with the generally accepted
accounting principles in India), the applicable Accounting Standards under sec 133 of
the Companies Act, 2013, read with para 7 of the Companies (Accounts) Rules 2014 (as
amended) and the relevant provisions of the Companies Act 2013(“the 2013 Act”) as
applicable..

The Company follows mercantile system of accounting and recognises significant items
of income and expenditure on accrual basis. Where it is not possible to determine the
quantum of accrual with reasonable certainty e.g. insurance and other claims, refund of
custom/excise duty etc., these continue to be accounted for on settlement basis.

ii) USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires estimates and assumptions to be made that affect the
reported amounts of assets and liabilities and disclosure of contingent liabilities on the
date of financial statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from these estimates and difference between
actual results and estimates are recognized in the period in which the results are
known/materialize.

iii) VALUATION OF INVENTORIES (AS-2)

Goods are valued at cost applying the FIFO Method of Inventory Valuation.

iv) DEPRECIATION (AS-6)

Depreciation on fixed assets has been provided on SLM method on prorata basis over
the useful life prescribed in schedule II to the Companies Act, 2013 after considering
salvage value of five percent of original cost. The Company has considered useful life of
assets same as prescribed under the Companies Act, 2013.

v) REVENUE RECOGNITION (AS-9)

The Company follows the mercantile system of accounting and recognizes income and
expenditure on accrual basis.

vi) FIXED ASSETS (AS-10 & 12)

Fixed assets are stated at cost of acquisition, net of tax/duty credit availed if any, including
any cost attributable for bringing the assets to its working condition for its intended use;
less accumulated depreciation. Government Subsidies directly related with an asset is
reduced from the cost of the asset as per stipulations of AS-12.

vii) FOREIGN CURRENCY TRANSACTION (AS-11)

a) The reporting currency of the Company is the Indian Rupee.

b) Foreign currency transactions are recorded on initial recognition in the reporting
currency, using the exchange rate predetermined on the basis of the agreed rate with
the banker backed by forward contract. At each balance sheet date, foreign currency
monetary items are reported using the exchange rate predetermined on the basis of the
agreed rate with the banker backed by forward contract. Non-monetary items which are
carried at historical cost denominated in a foreign currency are reported using the
exchange rate at the date of the transaction.

viii) INVESTMENTS (AS-13)

Investments are stated at cost. No provision is made for Diminution in the value of
investments, if any, since the same is considered by Board as temporary, while
investments are of long-term in nature.

ix) EMPLOYEE BENEFITS (AS-15)

a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to provident fund and Family Pension
Fund are accrued in accordance with applicable statute and deposited with appropriate
authorities.

ii) Defined Benefit Plan - The Company is in the process of finalizing an agency for
managing the gratuity fund and ascertaining the liability on the basis of actuarial
valuation. Pending finalization of the same liability for previous and current year, has
been provided on the basis of Company’s internal estimates.

b) Short term employment benefits

The undiscounted amount of short term employee benefits expected to be paid in
exchange for services rendered by employees is recognized during the period when the
employees renders the services. These benefits include compensated absence also.

x) BORROWING COST (AS-16)

Borrowing costs attributable to acquisitions and construction of assets are capitalized as a
part of the cost of such asset up to the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit & Loss Account.

xi) EARNING PER SHARE (AS-20)

The Company reports basic and diluted Earning Per Share (EPS) in accordance with
Accounting Standard (AS)-20 on “Earning Per Share”. The basic EPS is computed by
dividing the net profit or loss for the period by the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed by dividing the net profit
or loss for the period by the weighted average number of equity shares outstanding during
the period as adjusted for the effects of all dilutive potential equity shares, except where
the results are anti-dilutive.

xii) TAXES ON INCOME (AS-22)

Current tax is the amount of tax payable on taxable income for the year as determined
in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is
recognized on timing difference between taxable income and accounting income that
originate in one period and are capable of reversal on one or more subsequent period.
Deferred Tax assets are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be available against which
such deferred tax assets can be realized.

xiii) IMPAIRMENT OF ASSETS (AS-28)

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss is charged to the profit and loss account in the year in which an asset is
identified as impaired. An impairment loss recognized in prior period is reversed if there
has been a change in the estimate of recoverable amount.

xiv) SALES

a) Export sale is accounted for at the time of clearance of the goods at the Indian Customs
Stations.

b) Profit from sale of Import Licence and other incentives is recognized after confirmation
of realization of the proceeds.

xv) SEGMENTS ACCOUNTING

a) Segment Assets and Liabilities

Segment assets include all operating assets used by a segment and consists principally
of operating cash, debtors, inventories and fixed assets, net of allowances and
provisions which are reported as direct offsets in the Balance Sheet. Segment liabilities
include all operating liabilities and consists principally of creditors and accrued
liabilities. Segment assets and liabilities do not include deferred income taxes, share
capital, reserves, loans, investments, miscellaneous expenditure and profit and loss
appropriation account. While most of the assets/liabilities can be directly attributed to
the individual segments, the carrying amounts of certain assets/liabilities pertaining to
both segments are allocated to the segments on a reasonable basis.

b) Segment Revenue & Expenses

All segment revenues and expenses are directly attributable to the segments.