Accounting Policies of Vikram Aroma Ltd. Company

Mar 31, 2025

1. Corporate Information

Vikram Aroma Limited (referred to as ''the company'') was incorporated on March 17, 2021. The company has its registered office at A-704-714, The Capital, Science city Road, Ahmedabad - 380060, Gujarat, India.

The company has entered into a scheme of arrangement in the nature of demerger with Vikram Thermo (India) Limited to transfer the Aromatic Chemical-Diphenyl oxide business of the Vikram Thermo (India) Limited. Pursuant to the order of National Company Law Tribunal (NCLT) dated April 26, 2024, the said scheme of arrangement is approved, the Vikram Aroma will be listed on the stock exchanges & for which it is required to float an Information Memorandum in the market consisting of information about the company which included restated financial statements giving effect of demerger. The appointed date of the scheme is July 01, 2022.

2. Basis of Accounting:

a) Statement of Compliance:

These individual financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS). The Ind AS is prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto.

b) Basis of preparation:

1. The financial statements have been prepared on accrual basis of accounting under historical cost convention,

except for the following where the fair valuation have been carried out in accordance with the requirements of respective Ind As:

Employee defined benefit plans - plan assets.

The Operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in Ind AS 1- ''Presentation of Financial Statements'' and Schedule III to the Companies Act,2013.

2. Upto the year ended March 31, 2024, the Company prepared its financial statements in accordance with the

accounting standards notified under section 133 of the Companies Act 2013, read together with rules thereunder (''Indian GAAP'' or ''previous GAAP''). The current financial statements comprising of Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows as at March 31, 2025 have been prepared in accordance with Indian Accounting Standards (''Ind AS'') as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and amended thereto. These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2023. Previous period numbers in the financial statements have been restated to Ind AS. Refer Note 38 for an explanation of the transition from Indian GAAP to Ind AS.

For the purpose of presentation of these financial statements, the Audited Financial Statements for the year ended March 31, 2024 & March 31, 2023 prepared under Indian GAAP, were restated to Comply with Ind AS. Also, the effect of the scheme of Arrangement in the nature of Demerger between Vikram Thermo Limited and Vikram Aroma Limited has been incorporated in these financial statements w.e.f the appointed date i.e July 01, 2022.

Pursuant to the Scheme of Arrangement in nature of Demerger, the company has allotted equity shares to the shareholders of Vikram Thermo (India) Limited in the ratio of 1:10 i.e 1 Equity share for every 10 Equity shares held based on the record. The equity share capital of the company prior to the demerger has been cancelled & transferred to the capital reserve.

2A. MATERIAL ACCOUNTING POLICIES

(i) Use of Estimates:

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in financial statements have been specified in Note 2(iii) below. Accounting estimates could change from period to period. Actual results could differ from estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in financial statements in the period in which the changes are made and, if material, their effects are disclosed in these notes to the individual financial statements.

(ii) Critical Accounting Estimates and Judgement

a. Income Taxes

Significant judgements are involved in determining the provision for Income Taxes, including amount expected to be paid / recovered for uncertain tax positions. (Also refer Note 17,31 and 32)

b. Property, Plant and Equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful life and residual values of the Company''s assets are determined by the Management at the time the asset is acquired and reviewed periodically, including at each financial year end. The life is based on historical experience with similar assets as well as anticipation of future events, which may impact their life such as changes in technology. (Refer Note 4A)

c. Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on empirical evidence available without undue cost or effort, existing market conditions as well as forward looking estimates at the end of each reporting period. (Refer Note 9 & 39.I)

d. Defined Benefit Plan

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations is determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. (Refer Note 27)

e. Fair Value Measurement of Financial Instruments

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets, where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair values of financial instruments.

(iii) Property, Plant and Equipment & Depreciation:

a) Property Plant and Equipment:

Property, plant and equipment are tangible items that are held for use in the production or supply of goods and services, rental to others or for administrative purposes and are expected to be used during more than one period. The cost of an item of property, plant and equipment is recognised as an asset if and only, if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Freehold land is carried at cost less accumulated impairment losses if any. All other items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost of an item of property, plant and equipment comprises:

• Its purchase price, all costs including financial costs till commencement of commercial production are capitalized to the cost of qualifying assets. GST/Tax credit, if any, are accounted for by reducing the cost of capital goods;

• Any other costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

b) Capital work in progress:

Capital work in progress is stated at cost, comprising direct cost, related incidental expenses and attributable borrowing cost and net of accumulated impairment losses, if any. All the direct expenditure related to implementation including incidental expenditure incurred during the period of implementation of a project, till it is commissioned, is accounted as Capital work in progress (CWIP) and after commissioning the same is transferred / allocated to the respective item of property, plant and equipment. Pre-operating costs, being indirect in nature, are expensed to the profit or loss as and when incurred.

c) Depreciation methods, estimated useful life and residual value:

Depreciation is provided on straight line method for property, plant and equipment so as to expense the cost over their estimated useful lives based on evaluation which are as indicated in Schedule II to Companies Act,2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

The estimated useful lives are mentioned below: Nature of Assets Useful life(in Years)
Factory Building	30
Non-Factory Building
(a)RCC Frame Structure	60
(b)Non RCC Frame Structure	30
(c) Tube wells, Evaporation Pond	5
Plant & Equipment	20
Electrical Installations and Equipment	10
Office Equipment	5
Factory Equipment	10
Furniture & Fixtures	10
Computers	3
Vehicles	8
Depreciation is calculated on pro rata basis with reference to the date of addition/disposal.

d) Derecognition of Property, Plant and Equipment:

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss from the derecognition of an item of property, plant and equipment is recognised in the statement of profit and loss account when the item is derecognized.

(iv) Impairment of non - financial assets

The Company reviews the carrying amount of its Property, Plant and Equipment, including Capital Work in progress of a "Cash Generating Unit" (CGU) at the end of each reporting period to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the Cash Generating Unit to which the asset belongs.

Recoverable Amount is determined:

i) In case of individual asset, at higher of the fair value less cost of disposal and value in use; and

ii) In case of cash generating unit (a company of assets that generates identified, independent cash flows), at the higher of the cash generating unit''s fair value less cost to disposal and the value in use. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit and Loss.

(v) Financial Instruments :

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

1. Financial Assets:

i. Initial recognition and measurement:

At initial recognition, All financial assets and financial liabilities except trade receivables are initially measured at fair value. Fair value is adjusted for transaction costs if the financial asset or financial liability is not classified as subsequently measured at fair value through profit or loss. Trade receivables are initially measured at transaction price.

ii. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in following categories:

i) Financial assets measured at amortised cost;

ii) Financial assets at fair value through profit or loss (FVTPL).

The Company classifies its financial assets in the above mentioned categories based on:

a) The Company''s business model for managing the financial assets, and

b) The contractual cash flows characteristics of the financial asset.

i) Financial assets measured at amortised cost :

A financial asset is measured at amortised cost if both of the following conditions are met:

a) A financial asset is measured at amortised cost if the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the Contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

b) Financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

ii) Financial assets at fair value through profit or loss (FVTPL):

Financial assets are measured at fair value through profit and loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.

A financial asset is measured at fair value through profit or loss unless it is measured at amortised cost. In addition, The Company may elect to designate a financial asset, which otherwise meets amortised cost criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'')

Trade receivables, Advances, Security Deposits, Cash and Cash Equivalents etc. are classified for measurement at amortised cost.

iii. Derecognition:

The Company derecognizes a financial asset when contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset in its entirety, the difference between the assets''s carrying amount and the sum of the consideration received and receivable is recognized in the Profit or Loss.

iv. Impairment of financial assets:

The company assesses at the end of each reporting period whether a financial assets or group of financial assets is impaired. In accordance of Ind AS 109, the company applies expected credit loss (ECL) model for recognition and measurement of impairment loss.

In case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognised as loss allowance. As a practical expedient, the company uses a provision matrix to determine impairment loss on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of trade receivables. ECL impairment loss allowances (or reversal) recognized during the period is recognized as an expense / income respectively in the statement of profit and loss. Provision for ECL is presented as deduction from carrying amount of trade receivables.

For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12 month ECL.

2. Financial Liabilities:

i. Initial recognition and measurement:

All financial liabilities are recognised initially at fair value and subsequently carried at amortised cost using the effective interest method.

The company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

ii. Subsequent measurement:

i) Financial liabilities measured at amortised cost :

All financial liabilities are measured subsequently at amortised cost. Any discount or premium on redemption/ settlement is recognised in the Profit or Loss as finance cost over the life of the liability using the effective interest method and adjusted to the liability figure disclosed in the Balance Sheet.

iii. Derecognition:

Financial liabilities are derecognised when the liability is extinguished, that is, when the contractual obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the profit or loss.

(vi) Inventories:

Inventories are valued at lower of cost and net realizable value. Cost in respect of raw materials and stock in trade are determined on FIFO basis. Costs in respect of all other Inventories are computed on weighted average basis method. Net realizable value is the estimated selling price in the ordinary course of business less estimated cost necessary to make sale. Finished goods and process stock include cost of conversion and other costs incurred in acquiring the inventory and bringing them to their present location and condition.

Spares (not meeting the definition of property, plant and equipment) are accounted as inventory and expensed to the statement of profit and loss when issued for consumption.

Inventories are written down to net realizable value item by item except where it is appropriate to group similar or related items. When a decline in the price of materials, indicates that the cost of the finished products exceeds net realizable value, the materials are written down to their replacement cost. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed so that the new carrying amount is the lower of the cost and the revised net realizable value. Inventories are recognised as expense in the period in which the related revenue is recognised.

(vii) Income recognition :

Revenue from Contacts with Customers

Revenue from Contracts with Customers are recognised on satisfaction of performance obligation and measured at the transaction price for each separate performance obligation, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The transaction price is net of estimated customer returns, rebates and other similar allowances.

(a) Sale of Goods

Revenue from the sale of goods is recognized at a point in time when the control of the products has transferred which generally coincides with dispatch of products to customers in case of domestic sales and on the basis of bill of lading in the case of export sales.

At that Point in time, the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset or to restrict the access of other entities to those benefits.

(b) Rendering of Services

Revenue from Job work service contracts:

Job Work service contracts are recognised at point in time as control is transferred to the customer only on dispatch.

When the consideration is received, before the Company transfers goods to the customer, the Company shall present the consideration as a contract liability and when the services rendered by the Company exceed the payment, a contract asset is recognised excluding any amount presented as receivable.

Export Incentives

Export entitlements are recognized in the profit or loss when the right to receive credit as per the terms of scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

Interest Income

Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial assets except when the financial asset is credit-impaired in which case the effective interest rate is applied to the amortised cost of the financial asset. Effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s gross carrying amount on initial recognition.

(viii) Dividend:

The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorized and the dividend is no longer at the discretion of the Company. As per the corporate laws in India, dividend is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

(ix) Good & Service Tax (GST):

GST credit on materials purchased for production / service availed for production / input service are taken into account at the time of purchase. GST credit on purchase of capital items wherever applicable are taken into account as and when the assets are acquired and said credit are reduced from the cost of the assets aquired. The GST credits so taken are utilized for payment of GST liability on goods sold. The unutilized GST credit is carried forward in the books.

(x) Employee Benefits:

i. Short term employee benefits:

Short Term benefits are recognised as an expense at the undiscounted amounts in the profit or loss of the year in which the related service is rendered.

ii. Post employment benefits:

a) Defined contribution plan:

The Employee and Company make monthly fixed Contribution to Government of India Employee''s Provident Fund equal to a specified percentage of the Cover employee''s salary, Provision for the same is made in the year in which service are render by employee.

b) Defined benefit plans:

The Liability for Gratuity to employees, which is a defined benefit plan, as at Balance Sheet date determined on the basis of actuarial Valuation based on Projected Unit Credit method is funded to a Gratuity fund administered by the trustees and managed by Life Insurance Corporation of India and the contribution thereof paid/payable is absorbed in the accounts.

The present value of the defined benefit obligations is determined by discounting the estimated future cash flows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the profit or loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in balance sheet. Changes in present value of the defined benefit obligation resulting from plan amendment or curtailments are recognized immediately in profit or loss as past service cost.

iii. Other long term employee benefits:

Other long term employee benefits comprises of leave encashment towards un-availed leave and compensated absences, these are recognized based om the present value of defined obligation which is computed using the project unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. These are accounted either as current employee cost or included in cost of assets as permitted.

Remeasurement of leave encashment towards un-availed leave and compensated absences are recognized in the profit or loss except those included in cost of assets as permitted in the period which they occur.

(xi) Earnings per Share

The Company has given effect of the scheme of demerger retrospectively from the beginning of preceeding period as per the requirements of Appendix C of IND AS 103. Basic earnings per share is calculated by dividing net profit after tax for the year attributable to Equity Shareholders of the company by the weighted average number of Equity Shares issued during the year. Diluted earnings per share is calculated by dividing net profit attributable to equity Shareholders (after adjustment for diluted earnings) by average number of weighted equity shares outstanding including the effect of all dilutive potential ordinary shares.

(xii) Taxes on Income :

a) Current tax:

Current tax is determined on income for the year chargeable to tax on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Current tax items are recognised in correlation to the underlying transaction either in profit or loss or OCI or directly in equity. The Company has provided for the tax liability based on the significant judgment that the taxation authority will accept the tax treatment.

b) Deferred tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with asset will be realised. Deferred tax relating to items recognised outside profit or loss is recognised either in other comprehensive income or in equity.

(xiii) Leases :

As a Lessee

The Company''s leased assets consist of leases for Land. At inception of a contract, the company assesses whether a contract is, or contains, a lease. A contract is or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the company assesses whether: (i) the contract involves the use of an identified asset (ii) the company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and (iii) the company has the right to direct the use of the asset.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The lease liability is subsequently measured as given below:

(a) increasing the carrying amount to reflect interest on the lease liability;

(b) reducing the carrying amount to reflect the lease payments made; and

(c) remeasuring the carrying amount to reflect any reassessment or lease modifications.

It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for short term lease that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases on straight line basis as per the terms of the lease.

(xiv) Statement of Cash flows:

Cash flow from operating activities are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

3. Standards issued but not yet effective

(a) The Ministry of Corporate Affairs (MCA), The MCA notified Ind AS 117 on 9 September 2024 to be applicable from 1 April 2024. However, the same was withdrawn vide notification dated 28 September 2024 wherein the applicability of Ind AS 117 was made subject to notification of IRDAI. IRDAI has not notified Ind AS 117. Therefore, as of now, Ind AS 117 has been issued but from when it will be applicable is uncertain. The company is evaluating the impact of the standard on its balance sheet, statement of profit and loss and statement of cash flows.

(b) Ministry of Corporate Affairs vide its notification no. G.S.R. 291(E) dated 7th May 2025 has issued an amendment to Ind AS 21 providing guidance on determining exchange rate in case of lack of exchangeability. The amendment is effective from 1 April 2025. In accordance with the amendment to Ind AS 21 - Lack of Exchangeability, the Company is required to estimate the exchange rate using the most reliable inputs available. The company is evaluating the impact of the standard on its balance sheet, statement of profit and loss and statement of cash flows.

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Mar 31, 2024

1, Significant Accounting Policies

a. Basis of preparation

The financial statements of the Company have been prepared in accordance with the Generally Accepted

Accounting Principles in India {Indian GAAP) to comply with the Accounting Standards specified under

Section 133 of the Companies Act, 2013, read with Rule ? of the Companies (Accounts) Rules, 2014 and the

relevant provisions of the companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements

have been prepared as a going concern on accrual basis under the historical cost convention. The accounting

policies adopted in the preparation of the financial statements are consistent with those followed in the

previous year. f

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b. Use of estimates

in preparing the Company''s financial statements in conformity with the accounting principles generally
accepted in India, management is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the
current and future periods.

c. Property Plant and Equipment:

Property, plant and equipment are tangible items that are held for use in the production or supply of goods
and services, rental to others or for administrative purposes and are expected to be used during more than
one period. The cost of an item of property, plant and equipment is recognised as an asset if and only, if it is
probable that future economic benefits associated with the item will flow to the Company and the cost of
the item can be measured reliably, Freehold land is carried at cost less accumulated impairment losses. All
other items of property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost of an item of property, plant and equipment comprises:

* Its purchase price, all costs including financial costs till commencement of commercial production are
capitalized to the cost of qualifying assets. GST/Tax credit, if any, are accounted for by reducing the cost
of capital goods;

« Any other costs directly attributable to bringing the asset to the location and condition necessary for it to
be capable of operating in the manner intended by management.

All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no
future economic benefits are expected from its use or disposal. The gain or loss from the derecognition of an
item of property, plant and equipment is recognised in the statement of profit and loss account when the
item is derecognized.

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d- Depreciation on Property, Plant & Equipment:

Depreciation on Property, Plant & Equipment is provided on Written down value method at the rates
derived based on the life specified under Schedule II to the Companies Act, 2013. In respect of Property,

Plant & Equipment purchased during the period, depreciation is provided on a pro-rata basis from the date
on which such asset is ready to be put to use,

Individual assets costing less than Rs. 5,000/- are fully depreciated in the year of capitalization,
e. Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All
costs, including financing costs in respect of qualifying assets till commencement of commercial production,

net charges on foreign exchange contracts and adjustments arising from exchange rate variations
attributable to the intangible assets are capitalized.

intangible assets are amortized on a written down value over their estimated useful lives. A rebuttable
presumption that the useful life of an intangible asset will not exceed ten years from the date when the
asset is available for use is considered by the management. The amortization period and the amortization
method are reviewed at least at each reporting date. If the expected useful life of the asset is significantly
different from previous estimates, the amortization period is changed accordingly.

The gain or loss arising on the disposal or retirement of an intangible asset is determined as the difference
between net disposal proceeds and the carrying amount of the asset and is recognized as income or
expenses in the Statement of Profit and Loss in the year or disposal.

f- Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provision of
the Income Tax Act, 1961.

Deferred Tax resulting from ''''timing difference" between taxable and accounting income is accounted for
using the tax rates and laws that are enacted or subsequently enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent that there is virtual certainty that the
assets will be realized in future.

g- Revenue Recognition

I. Sales are accounted for on dispatch of goods to the customers and net of sales returns and trade
discounts. Sales Tax. Revenue is recognized when practically all risk and rights connected with
ownership have been transferred to the buyer.

II. Dividend on investment is recognized whers the right to receive the payment is established.

III. Interest Is recognized on time proportion basis relating to the amount outstanding and the rate
applicable.

h. Inventories

Inventories are valued at "Lower of cost and net realizable value". Cost in respect of Raw Materials is
computed on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business
less the estimated cost of completion and estimated cost necessary to make sale.

Costs in respect of Finished Goods are measured using weighted average basis and Cost in respect of other
inventories is computed on FIFO basis.

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i. Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as
part of the cost such assets, whenever applicable, till the assets are ready for their intended use. A qualifying
asset is one which necessary takes substantial period to get ready for intended use. Ail other borrowing

costs are charged to revenue accounts. Capitalization of borrowing cost is suspended when active
development is interrupted.

j. Accounting for Lease

The company''s significant leasing arrangements are in respect of operating lease for premises that are

cancelable in nature. The lease rentals paid under such agreements are charged to the Statement of Profit
and Loss.

k. Impairment

The management periodically assesses, using external and internal sources whether there is an indication
that an asset may be impaired. If an asset is impaired, the company recognizes an impairment loss as the
excess of the carrying amount of the asset over the recoverable amount. The impairment loss recognised in
prior accounting periods is reversed if there has been a change in the estimate of recoverable amounts.

i. Earnings per Share

Basic earnings per share is calculated by dividing net profit after tax for the year attributable to Equity
Shareholders of the company by the weighted average number of Equity Shares issued during the year.
Diluted earnings per share is calculated by dividing net profit attributable to equity Shareholders (after
adjustment for diluted earnings) by average number of weighted equity shares including potentially
convertible shares outstanding during the year.