Accounting Policies of Unilex Colours & Chemicals Ltd. Company

Mar 31, 2025

A. Basis of preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting
Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory
accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with
Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act. The accounting policies adopted
in the preparation of financial statements have been consistently applied. All assets and liabilities have
been classified as current or non-current as per the company’s normal operating cycle and other criteria set
out in the Schedule III to the Companies Act, 2013. Based on the nature of operations and time difference
between the provision of services and realization of cash and cash equivalents, the company has
ascertained its operating cycle as 12 months for the purpose of current and non-current classification of
assets and liabilities.

B. Use of Estimates

The preparation of financial statements is in conformity with Indian GAAP requires judgments, estimates
and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of
contingent liabilities on the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual results and estimates are recognized
in the period in which the results are known / materialized.

C. ACCOUNTING CONVENTION

The Company follows the mercantile system of accounting, recognizing income and expenditure on accrual
basis. The accounts are prepared on historical cost basis and as a going concern. Accounting policies not
referred to specifically otherwise, are consistent with the generally accepted accounting principles.

The following significant accounting policies are adopted in the preparation and presentation of these
financial statements:

1. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured.

Sales of goods are recognized on transfer of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers.

Interest income is accrued on a time proportion basis, by reference to the principle outstanding and the
effective interest rate applicable.

2. Property, Plant and Equipment

a) Property, Plant and Equipment are stated as per Cost Model i.e., at cost less accumulated depreciation
and impairment, if any;

b) Costs directly attributable to acquisition are capitalized until the Property, Plant and Equipment are
ready for use, as intended by the management;

c) Subsequent expenditures relating to Property, Plant and Equipment are capitalized only when it is
probable that future economic benefits associated with these will flow to the Company and the cost of the
item can be measured reliably. Repairs & maintenance costs are recognized in the Statement of profit &
Loss when incurred;

d) The cost and related accumulated depreciated are eliminated from the financial statements upon sale or
retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit or Loss.
Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell;

e) Depreciation on fixed assets will be calculated using the Straight-Line Method (SLM) method, which
involves applying depreciation rates prescribed under Schedule II to the Companies Act 2013. to the
carrying amount of the asset. The carrying amount is reduced each year by the amount of depreciation
charged.

f) Depreciation methods, useful lives, and residual values are reviewed periodically, including at each
financial year end;

3. IMPAIRMENT

The Management periodically assesses, using external and internal sources, whether there is an indication
that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset
exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price and value
in use, which means the present value of future cash flows expected to arise from the continuing use of the
asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can
be related objectively to an event occurring after the impairment loss was recognized. The carrying amount
of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the
carrying amount that would have been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in prior years.

4. INVENTORIES

Inventories are valued after providing for obsolescence, as follows:

Raw Materials -Lower of cost and net realizable value. However, materials and other items held for use in
the production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is determined on First in First out basis.

5. RETIREMENT BENEFITS & OTHER EMPLOYEE BENEFITS
Short-term employee benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement
of Profit and Loss for the year which includes benefits like Salary, wages and bonus, and are recognized as
expenses in the period in which the employee renders the related service.

Post- Employment Benefits:

(a) Defined Contribution Plans

The Company makes contributions to defined contribution plans such as Provident Fund and Employees’
State Insurance (ESI) in accordance with applicable laws and regulations. Provident Fund contributions
are made to the statutory provident fund maintained by the Government of India. These contributions are
recognised as an expense in the Statement of Profit and Loss in the period in which the employee renders
the related service. The Company has no further obligation beyond its monthly contributions. Employees’
State Insurance (ESI) contributions are made in accordance with the (a) Employees’ State Insurance Act,
1948. These contributions are also recognised as an expense in the Statement of Profit and Loss in the
period in which the employee renders the related service. The Company’s liability is limited to the amount
of contribution required under the statute. All the above schemes are classified as defined contribution
plans under Accounting Standard 15 (Revised) - Employee Benefits, and the Company’s liability is limited
to the extent of contributions made.

(b) Defined Benefit Plans

The Company’s defined benefit plan includes gratuity, which provides for a lump-sum payment to eligible
employees at retirement, death, incapacitation, or termination of employment, based on the employee’s last
drawn salary and tenure of service. The liability for gratuity is determined using the projected unit credit
method, based on actuarial valuation carried out at each reporting date by an independent actuary. The
present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using market yields on government bonds at the reporting date. Actuarial gains and losses are
recognised in the Statement of Profit and Loss in the period in which they arise. Past service cost, if any, is
recognized immediately.

6. FOREIGN EXCHANGE TRANSACTIONS

Foreign-currency denominated monetary assets and liabilities if any are translated at exchange rates in
effect at the Balance Sheet date. The gains or losses resulting from the transactions relating to purchase of
current a0073sets like Raw Material or other products are included in the Statement of Profit and Loss.
Revenue, expense and cash-flow items denominated in foreign currencies are translated using the
exchange rate in effect on the date of the transaction.

7. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of a non- cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities are segregated.

8. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are
capitalized as part of the cost of that asset till such time the asset is ready for its intended use. A qualifying
asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. Costs
incurred in raising funds are amortized equally over the period for which the funds are acquired. All other
borrowing costs are charged to profit and loss account.

9. INCOME TAX

The accounting treatment for the Income Tax in respect of the Company’s income is based on the
Accounting Standard on ‘Accounting for Taxes on Income’ (AS-22). The provision made for Income Tax in
Accounts comprises both, the current tax and deferred tax. Provision for Current Tax is made on the
assessable Income Tax rate applicable to the relevant assessment year after considering various
deductions available under the Income Tax Act, 1961.

Deferred tax is recognized for all timing differences; being the differences between the taxable income and
accounting income that originate in one period and are capable of reversal in one or more subsequent
periods. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on
the Balance Sheet date. The carrying amount of deferred tax asset/liability is reviewed at each Balance
Sheet date and consequential adjustments are carried out.

10. EARNINGS PER SHARE

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit
after tax by the weighted average number of equity shares considered for deriving basic earnings per share
and also the weighted average number of equity shares that could have been issued upon conversion of all
dilutive potential equity shares.

The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually
issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive
potential equity shares are determined independently for each period presented.