Garodia Chemicals Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

1. Corporate Information

GARODIA CHEMICALS LIMITED (the Company) is a company registered under Companies Act, 1956 and incorporated 6th January 1993. The main object of the company is to carry on the business of manufacturing and dealing in all types of dyes and chemicals and chemicals products pertaining to or concerned with the science or processes of chemistry and their byproducts and has a registered office located at149/156, Garodia Shopping Centre, Garodia Nagar, Ghatkopar East, Mumbai - 400077.

2A. Basis of preparation

The Statement of Assets and Liabilities of the Company as of 31^st March 2025 and the Statement of Profit and Loss, the Statement of Cash flows and the Statement of Changes in Equity for the year ended 31^st March 2025 has been prepared under Indian Accounting Standards (''Ind AS'') notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015. The financial Statement as at and for the year 31^st March 2025 along with financial statement as at and for the year ended March 31, 2025

Accounting Estimates

The preparation of the Standalone financial statements, in conformity with the Ind AS, requires the management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of Standalone financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognized in the period in which they are determined.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the Standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the Standalone financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the Standalone financial statements.

Going Concern

The accumulated Loss of the Company has eroded the Net Worth of the Company completely. The Company''s current liabilities exceeded its current assets. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. Earlier, In the view of the management the Company was making sincere efforts for the revival of the Business & the management was confident to recover the losses through improved profitability in foreseeable future. However, due to various circumstances the management has decided to cease the business of the company. Due to this the books of accounts are not prepared as per Going Concern assumption. The Company has no long-term assets to be designated as held for sale upon discontinuance of operations and/or subject to impairment tests. All assets and liabilities on 31^st March 2025 are current and carried at fair value.

2B. Significant accounting policies

A. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset/ liability is treated as current when it is:

a) Expected to be realized/ settled or intended to be sold or consumed in normal operating cycle

b) Held primarily for the purpose of trading

c) Expected to be realized/ settled within twelve months after the reporting period, or

d) 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/ liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

B. Fair value measurement

The Company''s accounting policies and disclosures require the measurement of fair values for, both financial and non -financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

C. Property, Plant and Equipment

An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses.

The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.

The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other nonrefundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Any trade discounts and rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Expenses directly attributable to new plant and equipment during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of property, plant, and equipment if the recognition criteria are met.

Capital work in progress and Capital advances:

Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as Other Non-Current Assets.

Depreciation/ Amortization:

a) Depreciation on tangible assets is provided on straight line basis considering the useful lives prescribed in Schedule II to the Act on a pro-rata basis.

b) Leasehold improvements are amortized based on primary lease period or their useful lives prescribed under Schedule -II, whichever is lower.

c) The asset''s useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.

d) An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

e) 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.

Derecognition:

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 arising from the Derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.

D. Intangible assets

Measurement at recognition:

Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalized and the related expenditure is recognized in the Statement of Profit and Loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any. Assets acquired but not ready for use are classified under Capital work-inprogress or intangible assets under development.

Amortization:

Intangible Assets with finite lives are amortized on a Straight-Line basis over the estimated useful economic life. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss.

Intangible assets with indefinite useful lives, are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment loss on intangible assets with indefinite life is recognized in the Statement of Profit & Loss.

Impairment:

An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. T o calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.

Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expense. Impairment losses, on assets other than goodwill are reversed in the Statement of Profit and Loss only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized.

E. 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. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward contracts.

Financial instruments also cover contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a nonfinancial item in accordance with the entity''s expected purchase, sale or usage requirements.

Derivatives are currently recognized at fair value on the date on which the derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.

Classification

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

Financial assets, other than equity, are classified into, financial assets at fair value through other comprehensive income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.

Business Model assessment and Solely payments of principal and interest (SPPI) test:

Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a business objective. This assessment includes judgement reflecting all relevant evidence including-

• How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity''s key management personnel

• The risks that affect the performance of the business model (and the financial assets held within that business model) and the way those risks are managed

• How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)

• The expected frequency, value and timing of sales are also important aspects of the Company''s assessment.

If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

Initial recognition and measurement

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at

FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the Statement of profit or loss.

Financial assets and financial liabilities, except for loans, debt securities and deposits are recognised on the trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are recognised when the funds are transferred to the customer''s account. Trade receivables are measured at the transaction price.

Subsequent measurement

• Financial assets at amortised cost

Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised cost using effective interest method less any impairment losses.

• Equity Instruments at FVOCI

These include financial assets that are equity instruments as defined in Ind AS 32 "Financial Instruments: Presentation" and are not held for trading and where the Company''s management has elected to irrevocably designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.

Gains and losses on these equity instruments are never recycled to profit or loss.

Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the payment has been established. Fair value through Profit and loss account financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in profit or loss.

• Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

• Other Financial Liabilities

These are measured at amortized cost using effective interest rate.

• Derecognition of Financial assets and Financial liabilities:

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

A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires.

• Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate.

• Reclassification of Financial assets

The company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances when the company changes its business model for managing such financial assets. The company does not reclassify its financial liabilities.

F. Provision and Contingent liabilities

Provisions

A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value (except where time value of money is material) and are determined based on the best estimate required to settle the obligation at the reporting date when discounting is used, the increase in provision due to passage of time is recognized as finance cost. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.

Provisions, contingent liabilities, contingent assets, and commitments are reviewed at each balance sheet date.

G. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

H. Revenue:

Sale of Services:

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. This variable consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognized only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.

Interest Income:

For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (EIR), which is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial instruments or a shorter period, where appropriate, to the net carrying amount of the financial assets. Interest income is included in other income in the Statement of Profit and Loss.

Dividend Income

Dividend income (including from FVOCI investments) is recognised when the Company''s right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably. This is generally when the shareholders or Board of Directors approve the dividend.

I. Employee Benefits

Short Term Benefits:

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Other long-term employee benefit obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements because of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

Post-Employment Obligations:

a) Gratuity

The Company''s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan.

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 the balance sheet.

b) Defined Benefit contribution plan

The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.

c) Bonus Plan

The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

J. Taxes

Current income tax

Current tax is the amount of tax payable (recoverable) in respect of the taxable profit / (tax loss) for the year determined in accordance with the provisions of the Income-Tax Act, 1961. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognized amounts; and

b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences except:

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets (including MAT credit) are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized except:

• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets (including MAT credit available) 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. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside profit or loss is recognized outside the statement of profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

GST paid on acquisition of assets or on incurring expenses

Expenses and assets are recognized net of the amount of GST (Goods and Service Tax) paid, except:

• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable

• When receivables and payables are stated with the amount of tax included the net amount of tax recoverable from, or payable to, the taxation authority is included as part of other current assets or liabilities in the balance sheet.

K. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset until such time that the asset is substantially ready for their intended use. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

L. Earnings per share

Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting Standard 33 ''Earnings per Share'', notified accounting standard by the Companies (Indian Accounting Standards) Rules of 2015 (as amended). Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources

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Mar 31, 2024

2B. Significant accounting policies

A. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset/ liability is treated as current when it is:

a) Expected to be realized/ settled or intended to be sold or consumed in normal operating cycle

b) Held primarily for the purpose of trading

c) Expected to be realized/ settled within twelve months after the reporting period, or

d) 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/ liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash
equivalents. The Company has identified twelve months as its operating cycle. Deferred tax assets and liabilities are
classified as non-current assets and liabilities.

B. Fair value measurement

The Company''s accounting policies and disclosures require the measurement of fair values for, both financial and non¬
financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair
values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party
information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the
evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS,
including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as
possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then
the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred.

C. Property, Plant and Equipment

An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following
initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and
accumulated impairment losses.

The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the
part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is
materially different from that of the remaining item.

The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other
nonrefundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its
intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Any trade discounts and
rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the
recognition criteria are met. Expenses directly attributable to new plant and equipment during its construction period are

capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and
machinery is capitalized under relevant heads of property, plant, and equipment if the recognition criteria are met.

Capital work in progress and Capital advances:

Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances
given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as Other Non-Current Assets.

Depreciation/ Amortization:

a) Depreciation on tangible assets is provided on straight line basis considering the useful lives prescribed in Schedule II to
the Act on a pro-rata basis.

b) Leasehold improvements are amortized based on primary lease period or their useful lives prescribed under Schedule -
II, whichever is lower.

c) The asset''s useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.

d) An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is
greater than its estimated recoverable amount.

e) 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.

Derecognition:

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 arising from the Derecognition of an item of property, plant
and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and
is recognized in the Statement of Profit and Loss when the item is derecognized.

D. Intangible assets

Measurement at recognition:

Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of
business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are
not capitalized and the related expenditure is recognized in the Statement of Profit and Loss in the period in which the
expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortization
and accumulated impairment loss, if any. Assets acquired but not ready for use are classified under Capital work-in¬
progress or intangible assets under development.

Amortization:

Intangible Assets with finite lives are amortized on a Straight-Line basis over the estimated useful economic life. The
amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss.

Intangible assets with indefinite useful lives, are not amortized, but are tested for impairment annually. The assessment of
indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a prospective basis. The impairment loss on intangible assets with
indefinite life is recognized in the Statement of Profit & Loss.

Impairment:

An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its
recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To
calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the
best estimate of the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable,
willing parties, less the cost of disposal.

Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization
expense. Impairment losses, on assets other than goodwill are reversed in the Statement of Profit and Loss only to the
extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined if no
impairment loss had previously been recognized.

E. 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. Financial instruments also include derivative contracts such as foreign currency foreign
exchange forward contracts.

Financial instruments also cover contracts to buy or sell a non-financial item that can be settled net in cash or another
financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the
exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non¬
financial item in accordance with the entity''s expected purchase, sale or usage requirements.

Derivatives are currently recognized at fair value on the date on which the derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period.

Classification

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

Financial assets, other than equity, are classified into, financial assets at fair value through other comprehensive income
(FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity
instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.

Business Model assessment and Solely payments of principal and interest (SPPI) test:

Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company
determines the business model at a level that reflects how groups of financial assets are managed together to achieve a
business objective. This assessment includes judgement reflecting all relevant evidence including-

• How the performance of the business model and the financial assets held within that business model are evaluated and
reported to the entity''s key management personnel

• The risks that affect the performance of the business model (and the financial assets held within that business model)
and the way those risks are managed

• How managers of the business are compensated (for example, whether the compensation is based on the fair value of
the assets managed or on the contractual cash flows collected)

• The expected frequency, value and timing of sales are also important aspects of the Company''s assessment.

If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the
Company does not change the classification of the remaining financial assets held in that business model, but incorporates
such information when assessing newly originated or newly purchased financial assets going forward.

Initial recognition and measurement

The classification of financial instruments at initial recognition depends on their contractual terms and the business model
for managing the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at

FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are
recognised immediately in the Statement of profit or loss.

Financial assets and financial liabilities, except for loans, debt securities and deposits are recognised on the trade date i.e.
when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are
recognised when the funds are transferred to the customer''s account. Trade receivables are measured at the transaction
price.

Subsequent measurement

• Financial assets at amortised cost

Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets
in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised
cost using effective interest method less any impairment losses.

• Equity Instruments at FVOCI

These include financial assets that are equity instruments as defined in Ind AS 32 "Financial Instruments: Presentation" and
are not held for trading and where the Company''s management has elected to irrevocably designated the same as Equity
instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are
recognised directly in other comprehensive income, net of applicable income taxes.

Gains and losses on these equity instruments are never recycled to profit or loss.

Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the
payment has been established. Fair value through Profit and loss account financial assets are measured at FVTPL unless it is
measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition
of financial assets at fair value through profit or loss are immediately recognised in profit or loss.

• Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

• Other Financial Liabilities

These are measured at amortized cost using effective interest rate.

• Derecognition of Financial assets and Financial liabilities:

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

A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires.

• Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair
value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit
losses and is calculated as the difference between their carrying amount and the present value of the expected future cash
flows discounted at the original effective interest rate.

• Reclassification of Financial assets

The company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional
circumstances when the company changes its business model for managing such financial assets. The company does not re¬
classify its financial liabilities.

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Mar 31, 2015

A) Basis of Accounting:

The Company follows the accrual system of accounting except gratuity and leave encashment i) benefits to employees.

ii) The financial statements are based on historical cost convention.

b) Fixed Assets :

i) Fixed Assets are stated at cost less accumulated depreciation.

ii) Capitalization of construction period expenses :

Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalized proportionately to respective assets.

c) Depreciation

Depreciation is provided on the fixed assets on straight line method in the manner specified in schedule II to the Companies Act, 2013.

d) Inventories :

Inventories are valued at lower of the cost and net realizable value.

e) Investments :

Investments are stated at cost.

f) Revenue Recognition:

i) Revenue from sale of goods and steam is recognized when the substantial risk and rewards of ownership are transferred to the buyer under the terms of the contract.

ii) Other items of income are accounted as and when right to receive arises.

g) Provision for Taxation :

Provision for tax is made on both current and deferred taxed. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax liabilities arising on account of timing difference and which are capable of reversals in subsequent period are provided using tax rates and tax laws that have been enacted or subsequently enacted.

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Mar 31, 2014

A) Basis of Accounting:

The Company follows the accrual system of accounting except gratuity and leave encashment

i) benefits to employees.

ii) The financial statements are based on historical cost convention.

b) Fixed Assets :

i) Fixed Assets are stated at cost less accumulated depreciation.

ii) Capitalisation of construction period expenses :

Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalised proportionately to respective assets.

c) Depreciation

Depreciation is provided on the fixed assets at the rates and in the manner specified in schedule XIV to the Companies Act, 1956 on straight line method.

d) Inventories :

Inventories are valued at lower of the cost and net realisable value. The cost has been determined as under:

e) Investments :

Investments are stated at cost.

f) Revenue Recognition:

i) Revenue from sale of goods and steam is recognized when the substantial risk and rewards of ownership are transferred to the buyer under the terms of the contract.

ii) Interest income is accured at applicable rate.

iii) Other items of income are accounted as and when right to receive arises.

g) Foreign Currency Transactions :

i) Foreign currency transactions are recorded at the exchange rate prevailing at the time of transactions.

ii) Current assets and Current liabilites are converted at the prevailing year end rate.

iii) Exchange Flutuation on account of acquisition of Fixed Assets is adjusted to carrying cost of Fixed Assets. Other fluctuation difference is adjusted In the profit and loss account.

h) Provision for Taxation :

Provision for tax is made on both current and deferred taxed. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax liabilites arising on account of timing difference and which are capable of reversals in subsequent period are provided using tax rates and tax laws tha have been enacted or subsequently enacted.

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Mar 31, 2012

A) Basis of Accounting:

i) The Company follows the accrual system of accounting except gratuity and leave encashment benefits to employees.

ii) The financial statements are based on historical cost convention.

b) Fixed Assets :

i) Fixed Assets are stated at cost less accumulated depreciation.

ii) Capitalisation of construction period expenses :

Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalised proportionately to respective assets.

c) Depreciation

Depreciation is provided on the fixed assets at the rates and in the manner specified in schedule XIV to the Companies Act, 1956 on straight line method.

d) Inventories:

Inventories are valued at lower of the cost and net realisable value. The cost has been determined as under:

i) Raw Materials - at cost-( FIFO basis.)

ii) Finished Products and Stock-in-process - at Raw Material cost adding proportionate ’conversion cost.

iii) Traded goods at cost-( FIFO basis).

e) INVESTMENTS:

Investments are stated at cost.

f) SALES:

Sales comprise of value of sale of goods excluding Sales tax but including excise duty.

g) FOREIGN CURRENCY TRANSACTIONS :

i) Foreign currency transactions are recorded at the exchange rate prevailing at the time of transactions.

ii) Current assets and Current liabilites are converted at the prevailing year end rate

iii) Exchange Flutuation on account of acquisition of Fixed Assets is adjusted to carrying cost of Fixed Assets. Other fluctuation difference is adjusted In the profit and loss account.

h) Provision for Taxation :

Provision for tax is made on both current and deferred taxed. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax liabilities arising on account of timing difference and which are capable of reversals in subsequent period are provided using tax rates and tax laws tha have been enacted or subsequently enacted.

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Mar 31, 2011

A) BASIS OF ACCOUNTING:

I) The Company follows the accrual system of accounting except gratuity and leave encashment benefits to employees.

ii) The financial statements are based on historical cost convention.

B) FIXED ASSETS:

I) Fixed Assets are stated at cost less accumulated depreciation.

Capitalisation of construction period expenses :

Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalised proportionately to respective assets.

C) DEPRECIATION :

Depreciation is provided on the fixed assets at the rates and in the manner specified in schedule XIV to the Companies Act, 1956 on straight line method.

D) INVENTORIES:

Inventories are valued at lower of the cost and net realisable value. The cost has been determined as under:

I) Raw Materials - at cost-( FIFO basis.)

II) Finished Products and Stock-in-process - at Raw Material cost adding proportionate 'conversion cost.

III) Traded goods at cost-( FIFO basis).

E) INVESTMENTS:

Investments are stated at cost.

F) SALES:

Sales comprise of value of sale of goods excluding Sales tax but including excise duty.

G) FOREIGN CURRENCY TRANSACTIONS :

I) Foreign currency transactions are recorded at the exchange rate prevailing at the time of transactions.

II) Current assets and Current liabilities are converted at the prevailing year end rate.

III) Exchange Fluctuation on account of acquisition of Fixed Assets is adjusted to carrying cost of Fixed Assets. Other fluctuation difference is adjusted In the profit and loss account.

H) Provision for Taxation:

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Mar 31, 2010

A) Basis of Accounting:

I) The Company follows the accrual system of accounting except gratuity and leave encashment benefits to employees.

ii) The financial statements are based on historical cost convention.

B) FIXED ASSETS:

I) Fixed Assets are stated at cost less accumulated depreciation.

II) Capitalisation of construction period expenses :

Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalised proportionately to respective assets.

C) DEPRECIATION:

Depreciation is provided on the fixed assets at the rates and in the manner specified in schedule XIV to the Companies Act, 1956 on straight line method.

D) INVENTORIES:

Inventories are valued at lower of the cost and net realisable value. The cost has been determined as under:

I) Raw Materials - at cost-( FIFO basis.)

II) Finished Products and Stock-in-process - at Raw Material cost adding proportionate 'conversion cost.

III) Traded goods at cost-( FIFO basis). ¦'

E) INVESTMENTS:

Investments are stated at cost.

F) SALES:

Sales comprise of value of sale of goods excluding Sales tax but including excise duty.

G) FOREIGN CURRENCY TRANSACTIONS :

I) Foreign currency transactions are recorded at the exchange rate prevailing at the time of transactions.

II) Current assets and Current liabilities are converted at the prevailing year end rate.

III) Exchange Fluctuation on account of acquisition of Fixed Assets is adjusted to carrying cost of Fixed Assets. Other fluctuation difference is adjusted In the profit and loss account.

H) Provision for Taxation :

1) Provision for tax is made on both current and deferred taxed. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax liabilities arising qp account of timing difference and which are capable of reversals in subsequent period are provided using tax rates and tax laws tha have been enacted or subsequently enacted.

2) As per the agreement for Assignment of Debt executed on 13th July, 2007 between IDBI (Assignor) and Aaskha Holding Pvt Ltd (Assignee). IDBI has transferred it's rights of the amount receivable from the company to the assignee, Consequently the amount payable as per Books of Accounts of the company to the IDBI, have been transferred in the name of the assignee i.e. Aaskha Holdings Pvt Ltd.