Accounting Policies of Shiv Texchem Ltd. Company

Mar 31, 2025

a. BASIS OF PREPARATION

Financial Statements for the year ended 31 si March 2025 have been prepared lo comply in all material respects
with the provisions of Part I of Chapter III of the Companies Act. 2013 (the "Act") read with Companies
(Prospectus and Allotment of Securities) Rules. 20M. Securities and F.xchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations. 2018 ("ICDR Regulations”) issued by SEBI and Guidance note on
Reports in Companies Prospectuses (Revised20l9) (“Guidance Note").

The Financial Statements 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 (Indian GAAP) and the requirements of the Companies Act. including the Accounting Standards
as prescribed by the Section 133 of the Companies Act. 2013 (“the Act") read with Rule 7 of Companies
(Accounts) Rules. 2021 (as Amended).

All assets and liabilities have been classified as current and non-current as per normal operating cycle of the
Company and other criteria set out in the Schedule III of the Companies Act. 2013.

I. Current/noii-currcnl classification

1 he Company presents assets and liabilities in the Balance Sheet based on Current Non-Current classification.

An asset is treated as Current when it is

- Expected to be realised or intended to be sold or consumed in normal operating cy cle;

- Held primarily for the purpose of trading:

- Expected to be realised w ithin 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 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.

I he company classilles all other liabilities as non-current.

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

II. Significant accounting estimates and assumptions

The preparation of the company''s financial statements requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carry ing amount of assets or liabilities affected in future
periods.

III. Property. Plant and F.quipinenl

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses, ifany.

Cost includes all expenses related to acquisition and installation of the concerned assets and any attributable cost
of bringing the asset to the condition of its intended use. The cost of self- constructed assets includes the cost of
materials and direct services, any other costs directly attributable to bringing the assets to its working condition
for their intended use.

All other expenses on existing Fixed Assets, including day to day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of prolit and loss for the period during which such expenses are
incurred.

I he residual values, useful lives and methods of depreciation of Property. Plant and F.quipment are reviewed at
each financial sear end and adjusted prospectively, if appropriate.

Gains or losses arising from derecognition of a Property. Plant and Equipment are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of
Profit and Loss when the asset is derecognised.

Depreciation / Amortisation and Useful Life of Property, Plant and Equipment / Intangible Assets

Depreciation on property, plant and equipment have been provided under the Written down Value method, based
on useful lives of assets as estimated by the management or the useful lives of the assets as prescribed in Schedule

II to the Companies Act 2013. whichever is lower. Depreciation is charged on a monthly pro-rata basis for assets
purchased/sold during the year.

Following are the estimated useful lives of various category of assets used:

IV. Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an asset any be impaired. If
any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable
amount of the cash generating unit to which the asset belongs is less than its earn ing amount, the carrying amount
is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit
and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is asset is reflected at the recoverable amount subject to a maximum of
depreciated historical cost.

V. Inventories

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if
any. Cost of inventories comprises of cost of purchase, and other costs net of recoverable taxes incurred in
bringing them to their respective present location and condition.

VI. Investments

Long term Investments are accounted at cost and carried at cost. If there is a decline, other than temporary, in the
value of a long term investment, the carrying amount is reduced to recognise the decline.

Cost of an investment includes acquisition charges such as brokerage, fees and duties.

Current investments may be carried at the lower of cost and fair value.

On disposal of an investment, the difference between the earn ing amount and the disposal proceeds, net of
expenses, is recognised in the profit and loss statement.

When disposing of a part of the holding of an individual investment, the carrying amount to be allocated to that

part is to be determined on the basis of the average earning amount of the total holding of the investment.

VII. C ash and Cash equivalents

Cash and Cash Equivalents comprise of cash in hand, cash at hanks, short term deposits and short term highly
liquid investments that are readils convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.

VIII. Revenue recognition

O The Company earns revenue primarily from sale of chemical products. Revenue is recognised at the
transaction price upon transfer of control of promised products or serv ices to customers in an amount that reflects
the consideration which the Company expects to receive in exchange for those products or services. Revenue is
recognised to the extent that it is probable that the economic benefits will Mow to the Company and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is recognized at point in lime
when the performance obligation w ith respect to sale of chemicals or rendering of services to the customer which
is the point in time when the customer receives the goods and services.

Revenue is measured ai the transaction price received or receivable, after the deduction of any trade discounts,
volume rebates, sales return on transfer of control in respect of ownership to the buyer which is generally on
dispatch of goods and any other taxes or duties collected on behalf of the government which are levied on sales
such as Goods and Services Tax (GST). Discounts given include rebates, price reductions and other incentives
given to customers. No element of financing is deemed present as the sales are made with a payment term which
is consistent with market practice.

O Other Income: Revenue in respect of Insurance ''other claims, commission etc. are recognised only when it is
reasonably certain that the ultimate collection will be made. Interest income is recognised on time proportion
basis taking into account the amount outstanding and the rale applicable. Insurance claim are accounted when the
right to receive is established and the claim is admitted by the surveyor. Revenue in respect of other income is
recognised to the extent that the company is reasonably certain of its ultimate realisation.

IX. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition of an asset that necessarily takes a substantial
period of time to get ready for its intended use are capitalised as part of the cost of that asset till the date it is put
to use.

Borrowing costs are not capitalised where the Property, plant and equipment do not take a substantial period of
time to get ready for its intended use.

X. Earnings per share

Basic Earnings Per Share is calculated by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share
adjusts the figures used in determination of basic earnings per share to take into account the conversion of all
dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the
period unless issued at a later date.

XI. Income Taxes

Tax expense for the year comprises current tax and deferred tax.

Current Tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. T he tax rates and tax laws used to compute the amount are those that are enacted at the
reporting date.

Deferred tax:

Deferred tax charge or benefit is the tax effects of timing difference between accounting income and taxable
income for the year. The deferred tax charge or benefit and corresponding deferred tax liabilities or assets are
recognized using the tax rates that have been enacted or substantially 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 asset are
recognized only if there is a virtual certainty of realization of such assets.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilized.

XII. Leases

Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases
and recorded as expense as and when the payments are made over the lease term.

XIII. Employee Benefits

a) Short term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services
rendered by employees are recognised as an expense during the period when the employees render the services,
h) Post-employment benefit:

Defined Contribution Plans

I lie company deposits the contributions for provident fund and Employee State Insurance to the appropriate
government authorities and these contributions are recognized in the statement of Profit & Loss in the financial
year to which they relate.

Defined Benefit Plans

The company pays gratuity to the employees who have completed five years of service at the time of
resignation superannuation. I he gratuity is paid ® 15 days salary for every completed year of serv ice as per the
Payment of Gratuity Act. 1972.

the liability in respect of gratuity and other post- employment benefits is calculated using the Projected Unit
Credit Method and spread over the period during which the benefit is expected to be derived from employees’
services. Liability for above defined benefit plan is provided on the basis of actuarial valuation as at the Balance
Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the
Projected Unit Credit method.

XIV. Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange difference
arising on settlement of transactions and translation of monetary items are recognised as income or expense in the
year in which they arise. Gain or loss on other forward and hedge contracts are recognised in the Statement of
Protlt and Loss. The difference between the forward rate and the exchange rate at the inception of the forward
contract for underlying transactions is recognised as per the principles herein. In respect of hedge contracts, for
firm commitment or forecasted transactions, the attributable loss is accrued on periodic settlement and/or
completion of contract and is recognised as per the principles set out herein.