Accounting Policies of Proventus Agrocom Ltd. Company

Mar 31, 2025

1. Significant accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in
accordance with generally accepted accounting
principles in India (''Indian GAAP'') under the
historical cost convention on an accrual basis
except for certain financial instruments which
are measured at fair values in compliance with
all material aspects of the Accounting Standard
(AS) Notified under Section 133 of the Companies
Act, 2013 read together with paragraph 7 of the
Companies (Accounts) Rules 2014, the provisions
of the Companies Act, 2013 (to the extent
notified). The financial statements are prepared &
presented in Indian rupees.

1.2 Use of estimates

The preparation of the financial statements
in conformity with the generally accepted
accounting principles requires the management
to make estimates and assumptions that affect
the reported amounts of assets, liabilities,
revenues and expenses and disclosure of
contingent liabilities on date of the financial
statements. Actual results could differ from
the estimates. Any revision to the accounting
estimates is recognised prospectively in current
and future periods.

1.3 Current-non-current classification

All assets and liabilities are classified into current
and non-current

Assets

An Asset is classified as current when it satisfies
any of the following criteria:

a. It is expected to be realized in, or is intended
for sale or consumption in, the company''s
normal operating cycle;

b. It is held primary for the purpose of being
traded;

c. It is expected to be realized within 12 months
after the reporting date; or

d. It is cash or cash equivalent unless it is
restricted from being exchanged or used to
settle a liability for at least 12 months after
the reporting date.

Current Assets include the current portion of
non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies
any of the following criteria:

a. It is expected to be settled in the company''s
normal operating cycle.

b. It is held primarily for the purpose of being
traded;

c. It is due to be settled within 12 months after
the reporting date; or

d. The company does not have an unconditional
right to defer settlement of the liability for
at least 12 months after the reporting date.
Terms of the liability that could, at the option
of the counterparty, results in its settlement
by the issue of equity instruments do not
affect its classification.

Current liabilities include current portion of non¬
current financial liabilities.

All other liabilities are classified as non-current.

1.4 Revenue recognition

• Sale of commodity is recognized when all
the significant risks and rewards have been
passed to the buyer.

• Income from treasury operations comprises

of profit/loss on sale of securities and
profit/loss on equity derivatives, commodity
derivatives and currency derivative

instruments.

i) Profit/loss on sale of securities is
determined based on the cost of the
securities sold.

ii) Realised profit/ loss on closed

positions of derivative instruments

is recognised on final settlement

on squaring-up of the contracts.
Outstanding derivative contracts

in the nature of forwards / futures /
options are measured at fair value as
at the balance sheet date. Fair value
is determined using quoted market
prices in an actively traded market, for
the instrument, wherever available, as
the best evidence of fair value. In the
absence of quoted market prices in
an actively traded market, a valuation
technique is used to determine the
fair value. In most cases the valuation
techniques use observable market
data as input parameters in order
to ensure reliability of the fair value
measure.

• Profit/loss earned on sale of investments is
recognised on trade date basis. Profit/loss
on sale of investments is determined based
on the cost of the investments sold.

• Interest income is recognised on accrual
basis.

• Dividend income is recognised when the
right to receive payment is established.

1.5 Impairment of assets

The Company assesses at each balance sheet
date whether there is any indication that an asset
may be impaired based on internal/external
factors. If any such indication exists, the Company
estimates the recoverable amount of the asset.
If such recoverable amount of the asset is less
than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized
in the statement of profit and loss. If at the balance
sheet date there is an indication that a previously
assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset
is reflected at the recoverable amount subject to
a maximum of the depreciable historical cost.

1.6 Foreign currency transactions

Foreign currency transactions are recorded at
the rates of exchange prevailing on the date of the
transaction. Exchange differences, if any arising
out of transactions settled during the year are
recognised in statement of profit and loss of the
year.

Monetary assets and liabilities denominated in
foreign currencies as at the balance sheet date
are translated at the closing exchange rates
on that date. The exchange differences, if any,
are recognised in statement of profit and loss
of the year and related assets and liabilities are
accordingly restated in the balance sheet.

1.7 Inventories

• Raw materials, stores, spares, and trading
goods are valued at lower of cost and net
realizable value.

• Work-in-Progress and finished goods are
valued at the lower of cost and net realizable
value. Cost includes direct materials
and labour and a part of manufacturing
overheads based on normal operating
capacity.

• Net realizable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and
estimated costs necessary to make the sale.

• Cost comprises of cost of Purchase & other
costs incurred in bringing them to their
respective present location and condition
and is determined on average basis.

1.8 Investments

• Investments are classified into long term
investments and current investments.
Investments which are intended to be held
for one year or more are classified as long
term investments and investments which
are intended to be held for less than one year
are classified as current investments.

• Long term investments are carried at cost
less diminution in value which is other than
temporary, determined separately for each
investment.

• Current investments are carried at lower of ^_
cost and fair value. The comparison of cost
and fair value is done separately in respect
of each category of investment. In case of
investments in mutual funds, the net asset
value of units declared by the mutual funds
is considered as the fair value.

1.9 Earnings per share

The Company reports basic and diluted earnings per
share in accordance with Accounting Standard 20
- Earnings Per Share prescribed under Section 133
of the Companies Act, 2013 read with Rule 7 of the
Companies (Accounts) Rules, 2014. Basic earnings per
share is computed by dividing the net profit after tax
attributable to the equity shareholders by the weighted
average number of equity shares outstanding for the
year.

Diluted earnings per share reflect the potential dilution
that could occur if securities or other contracts to issue
equity shares were exercised or converted during the
year. Diluted earnings per share is computed by dividing
the net profit after tax by the weighted average number
of equity shares and dilutive potential equity shares
outstanding during the year.

1.10 Fixed assets and depreciation
Tangible fixed assets

Fixed assets are stated at cost less accumulated
depreciation. The cost of fixed assets comprises
purchase price and any attributable cost of
bringing the asset to its working condition for its
intended use.

Depreciation is provided on a written down value
basis from the date the asset is ready for its
intended use or put to use whichever is earlier. In
respect of assets sold, depreciation is provided
upto the date of disposal.

As per the requirement of Schedule II of the
Companies Act, 2013, the Company has evaluated
the useful lives of the respective fixed assets
which are as per the provisions of Part C of the
Schedule for calculating the depreciation. The
useful lives of the fixed assets are as follows:

Intangible fixed assets

Intangible fixed assets are recorded in
consideration paid for the acquisition of such
assets and are carried at cost less accumulated
amortization and impairment, if any.

Intangibles such as software is amortised over
a period of 3 years or its estimated useful life
whichever is shorter.

1.11 Taxation

Tax expense comprises current tax (i.e. amount
of tax for the period determined in accordance
with the Income Tax Act, 1961) and deferred tax
charge or credit (reflecting the tax effect of
timing differences between accounting income
and taxable income for the period).

Current tax

Provision for income tax is recognized based on
estimated tax liability computed after adjusting
for allowances, disallowances and exemptions in
accordance with the Income Tax Act, 1961.

Deferred taxation

The deferred tax charge or credit and the
corresponding deferred tax liabilities and assets
are recognized using the tax rates that have been
enacted or substantively enacted at the balance
sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty
that the asset can be realised in future; however,
where there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax
assets are recognised only if there is a virtual
certainty of realisation of the assets. Deferred
tax assets are reviewed at each balance sheet
date and written down or written-up to reflect the
amount that is reasonably / virtually certain (as
the case may be) to be realised.

Minimum Alternative Tax (MAT) credit

MAT credit asset is recognized where there is
convincing evidence that the asset can be realized
in future. MAT credit assets are reviewed at each
balance sheet date and written down or written up
to reflect the amount that is reasonably certain to
be realised.

---

Mar 31, 2024

1. Significant accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with generally accepted accounting principles in India (''Indian GAAP'') under the historical cost convention on an accrual basis except for certain financial instruments which are measured at fair values in compliance with all material aspects of the Accounting Standard (AS) Notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014, the provisions of the Companies Act, 2013 (to the extent notified). The financial statements are prepared & presented in Indian rupees.

1.2 Use of estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on date of the financial statements. Actual results could differ from the estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

1.3 Current-non-current classification

All assets and liabilities are classified into current and non-current

Assets

An Asset is classified as current when it satisfies any of the following criteria:

a. It is expected to be realized in, or is intended for sale or consumption in, the company''s normal operating cycle;

b. It is held primary for the purpose of being traded;

c. It is expected to be realized within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current Assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the company''s normal operating cycle.

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of the liability that could, at the option of the counterparty, results in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of noncurrent financial liabilities.

All other liabilities are classified as non-current.

1.4 Revenue recognition

• Sale of commodity is recognized when all the significant risks and rewards have been passed to the buyer.

• Income from treasury operations comprises

of profit/loss on sale of securities and profit/loss on equity derivatives, commodity derivatives and currency derivative

instruments.

i) Profit/loss on sale of securities is determined based on the cost of the securities sold.

ii) Realised profit/ loss on closed

positions of derivative instruments

is recognised on final settlement

on squaring-up of the contracts. Outstanding derivative contracts

in the nature of forwards / futures / options are measured at fair value as at the balance sheet date. Fair value is determined using quoted market prices in an actively traded market, for the instrument, wherever available, as the best evidence of fair value. In the absence of quoted market prices in an actively traded market, a valuation technique is used to determine the fair value. In most cases the valuation techniques use observable market data as input parameters in order to ensure reliability of the fair value measure.

• Profit/loss earned on sale of investments is recognised on trade date basis. Profit/loss on sale of investments is determined based on the cost of the investments sold.

• Interest income is recognised on accrual basis.

• Dividend income is recognised when the right to receive payment is established.

1.5 Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of the depreciable historical cost.

1.6 Foreign currency transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transaction. Exchange differences, if any arising out of transactions settled during the year are recognised in statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. The exchange differences, if any, are recognised in statement of profit and loss of the year and related assets and liabilities are accordingly restated in the balance sheet.

1.7 Inventories

• Raw materials, stores, spares, and trading goods are valued at lower of cost and net realizable value.

• Work-in-Progress and finished goods are valued at the lower of cost and net realizable value. Cost includes direct materials and labour and a part of manufacturing overheads based on normal operating capacity.

• Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

• Cost comprises of cost of Purchase & other costs incurred in bringing them to their respective present location and condition and is determined on average basis.

1.8 Investments

• Investments are classified into long term investments and current investments. Investments which are intended to be held for one year or more are classified as long term investments and investments which are intended to be held for less than one year are classified as current investments.

• Long term investments are carried at cost less diminution in value which is other than temporary, determined separately for each investment.

• Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investment. In case of investments in mutual funds, the net asset value of units declared by the mutual funds is considered as the fair value.

1.9 Earnings per share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 - Earnings Per Share prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Basic earnings per share is computed by dividing the net profit after tax attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

1.10 Fixed assets and depreciation Tangible fixed assets

Fixed assets are stated at cost less accumulated depreciation. The cost of fixed assets comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Depreciation is provided on a written down value basis from the date the asset is ready for its intended use or put to use whichever is earlier. In respect of assets sold, depreciation is provided upto the date of disposal.

As per the requirement of Schedule II of the Companies Act, 2013, the Company has evaluated the useful lives of the respective fixed assets which are as per the provisions of Part C of the Schedule for calculating the depreciation. The useful lives of the fixed assets are as follows:

Nature of assets	Useful Life
Motor vehicles	8 years
Office equipment	5 years
Furniture & Fixture	10 years
Leasehold Improvement	5 years
Computers and data processing units - End user devices, such as desktops, laptops, etc. (other then server).	3 years
Plant & Equipment	15 years

Intangible fixed assets

Intangible fixed assets are recorded in consideration paid for the acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any.

Intangibles such as software is amortised over a period of 3 years or its estimated useful life whichever is shorter.

1.11 Taxation

Tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the period).

Current tax

Provision for income tax is recognized based on estimated tax liability computed after adjusting for allowances, disallowances and exemptions in accordance with the Income Tax Act, 1961.

Deferred taxation

The deferred tax charge or credit and the corresponding deferred tax liabilities and assets are recognized using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised.

Minimum Alternative Tax (MAT) credit

MAT credit asset is recognized where there is convincing evidence that the asset can be realized in future. MAT credit assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably certain to be realised.

1.12 Provisions and contingencies

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation

in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

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.

Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise, the asset and related income are recognised in the period in which the change occurs.

1.13 Operating leases

Lease payments for assets taken on operating lease are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

1.14 Employee Benefits:

The Company makes monthly contribution to provident fund in respect of employees covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 at the rate specified in the act and the same is charged to revenue.

Gratuity paid during the year is debited to liability account at the time of payment andliability on account of gratuity is provided on the date of Balance Sheet on actuarial valuation basis, at the end of the year.

---

Mar 31, 2023

Significant accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with generally accepted accounting principles in India (''Indian GAAP'') under the historical cost convention on an accrual basis except for certain financial instruments which are measured at fair values in compliance with all material aspects of the Accounting Standard (AS) Notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014, the provisions of the Companies Act, 2013 (to the extent notified). The financial statements are prepared & presented in Indian rupees.

1.2 Use of estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on date of the financial statements. Actual results could differ from the estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

1.3 Current-non-current classification

All assets and liabilities are classified into current and non-current Assets

An Asset is classified as current when it satisfies any of the following criteria:

a. It is expected to be realized in, or is intended for sale or consumption in, the company''s normal operating cycle;

b. It is held primary for the purpose of being traded;

c. It is expected to be realized within 12 months after the reporting date; or

d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current Assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the company''s normal operating cycle.

b. It is held primarily for the purpose of being traded;

c. It is due to be settled within 12 months after the reporting date; or

d. The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of the liability that could, at the option of the counterparty, results in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

1.4 Revenue recognition

• Sale of commodity is recognized when all the significant risks and rewards have been passed to the buyer.

• Income from treasury operations comprises of profit/loss on sale of securities and profit/loss on equity derivatives, commodity derivatives and currency derivative instruments.

i) Profit/loss on sale of securities is determined based on the cost of the securities sold.

ii) Realised profit/ loss on closed positions of derivative instruments is recognised on final settlement on squaring-up of the contracts. Outstanding derivative contracts in the nature of forwards / futures / options are measured at fair value as at the balance sheet date. Fair value is determined using quoted market prices in an actively traded market, for the instrument, wherever available, as the best evidence of fair value. In the absence of quoted market prices in an actively traded market, a valuation technique is used to determine the fair value. In most cases the valuation techniques use observable market data as input parameters in order to ensure reliability of the fair value measure.

• Profit/loss earned on sale of investments is recognised on trade date basis. Profit/loss on sale of investments is determined based on the cost of the investments sold.

• Interest income is recognised on accrual basis.

• Dividend income is recognised when the right to receive payment is established.

1.5 Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of the depreciable historical cost.

1.6 Foreign currency transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transaction. Exchange differences, if any arising out of transactions settled during the year are recognised in statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. The exchange differences, if any, are recognised in statement of profit and loss of the year and related assets and liabilities are accordingly restated in the balance sheet.

1.7 Inventories

• Raw materials, stores, spares, and trading goods are valued at lower of cost and net realizable value.

• Work-in-Progress and finished goods are valued at the lower of cost and net realizable value. Cost includes direct materials and labour and a part of manufacturing overheads based on normal operating capacity.

• Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

• Cost comprises of cost of Purchase & other costs incurred in bringing them to their respective present location and condition and is determined on average basis.

1.8 Investments

• Investments are classified into long term investments and current investments. Investments which are intended to be held for one year or more are classified as long term investments and investments which are intended to be held for less than one year are classified as current investments.

• Long term investments are carried at cost less diminution in value which is other than temporary, determined separately for each investment.

• Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investment. In case of investments in mutual funds, the net asset value of units declared by the mutual funds is considered as the fair value.

1.9 Earnings per share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 -Earnings Per Share prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Basic earnings per share is computed by dividing the net profit after tax attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

1.10 Fixed assets and depreciation Tangible fixed assets

Fixed assets are stated at cost less accumulated depreciation. The cost of fixed assets comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Depreciation is provided on a written down value basis from the date the asset is ready for its intended use or put to use whichever is earlier. In respect of assets sold, depreciation is provided upto the date of disposal.

As per the requirement of Schedule II of the Companies Act, 2013, the Company has evaluated the useful lives of the respective fixed assets which are as per the provisions of Part C of the Schedule for calculating the depreciation. The useful lives of the fixed assets are as follows:

Nature of assets	Useful Life
Motor vehicles	8 years
Office equipment	5 years
Furniture & Fixture	10 years

Leasehold Improvement	5 years
Computers and data processing units - End user devices, such as desktops, laptops, etc. (other then server).	3 years
Plant & Equipment	15 years

Intangible fixed assets

Intangible fixed assets are recorded in consideration paid for the acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any.

Intangibles such as software is amortised over a period of 3 years or its estimated useful life whichever is shorter.

1.11 Taxation

Tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the period).

Current tax

Provision for income tax is recognized based on estimated tax liability computed after adjusting for allowances, disallowances and exemptions in accordance with the Income Tax Act, 1961.

Deferred taxation

The deferred tax charge or credit and the corresponding deferred tax liabilities and assets are recognized using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised.

Minimum Alternative Tax (MAT) credit

MAT credit asset is recognized where there is convincing evidence that the asset can be realized in future. MAT credit assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably certain to be realised.

1. Significant accounting policies (continued)

1.12 Provisions and contingencies

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

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.

Contingent assets are not recognised in the financial statements. However, contingent assets are

assessed continually and if it is virtually certain that an economic benefit will arise, the asset and related income are recognised in the period in which the change occurs.

1.13 Operating leases

Lease payments for assets taken on operating lease are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

1.14 Employee Benefits:

The Company makes monthly contribution to provident fund in respect of employees covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 at the rate specified in the act and the same is charged to revenue.

Gratuity paid during the year is debited to liability account at the time of payment and liability on account of gratuity is provided on the date of Balance Sheet on actuarial valuation basis, at the end of the year.