Trom Industries Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

B. SIGNIFICANT ACCOUNTING POLICIES FOR PREPARATION OF FINANCIAL
STATEMENTS

B.1 Accounting Convention

The financial statement has been prepared under the historical cost convention on the “Accrual
Concept” except for certain financial instruments which are measured at fair values and Going Concern
assumptions of accountancy in accordance with the accounting principles generally accepted in India
and comply with the accounting standards as prescribed by Companies (Accounting Standard) Rules,
2021 and with the relevant provisions of the Companies Act, 2013 and rules made there under.

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rs. In
Lakh as per the requirement of division II of Schedule III, unless otherwise stated.

B.2 Use of Estimates and Judgements

The preparation of financial statements requires management to make estimates, judgements and
assumptions that affect the reported amount of assets and liabilities on the date of the financial
statement and the reported amount of revenues and expenses during the reporting period. The
application of accounting policies that require critical accounting estimates, which involve complex
and subjective judgments and the use of assumptions in these financial statements, have been disclosed
in notes. Accounting estimates could change from period to period. Actual results could differ from
those estimates. Appropriate changes in estimates are made as management becomes aware of changes
in circumstances surrounding the estimates. Changes in estimates and judgements are reflected in the
financial statements in the period in which changes are made and, if material, their effects are disclosed
in the notes to the financial statements.

B.3 Current and Non - Current Classification

An asset or a liability is classified as Current when it satisfies any of the following criteria:

i. It is expected to be realized / settled, or is intended for sales or consumptions, in the
Company''s Normal Operating Cycle;

ii. It is held primarily for the purpose of being traded.

iii. It is expected to be realized / due to be settled within twelve months after the end of reporting
date;

iv. The Company does not have an unconditional right to defer the settlement of the liability for
at least twelve months after the reporting date.

All other assets and liabilities are classified as non-Current.

For the purpose of Current / Non - Current classification of assets and liabilities, the Company has
ascertained its operating cycle as twelve months. This is based on the nature of services and the time
between the acquisition of the assets or liabilities for processing and their realization in Cash and Cash
Equivalents.

C. Basis of Preparation

1) Presentation and Disclosure of Financial Statements

These financial statements have been prepared as per “Schedule - III” notified under the
Companies Act, 2013. The Company has also reclassified / regrouped / restated the previous year
figures in accordance with the requirements applicable in the current year.

2) Property, Plant and Equipment

Property, Plant and Equitpment are stated at cost less accumulated depreciation and impairment
losses, if any. Cost comprises of all expenses incurred to bring the assets to its present location and
condition. Borrowing cost directly attributable to the acquisition /construction is included in the
cost of fixed assets. Adjustments arising from exchange rate variations attributable to the fixed
assets are capitalized.

In case of new projects / expansion of existing projects, expenditure incurred during construction /
preoperative period including interest and finance charge on specific / general purpose loans, prior
to commencement of commercial production are capitalized. The same are allocated to the
respective on completion of construction / erection of the capital project / fixed assets.

Subsequent expenditures related to an item of tangible asset are added to its book value only if
they increase the future economic benefits from the existing asset beyond its previously assessed
standard of performance.

Capital assets (including expenditure incurred during the construction period) under erection /
installation are stated in the Balance Sheet as “Capital Work in Progress.”

3) Depreciation

All fixed assets, except capital work in progress, are depreciated on WDV Method. Depreciation is
provided based on useful life of the assets and depreciation rates as prescribed in Schedule II to the
Companies Act, 2013. Depreciation on additions to / deletions from fixed assets made during the
period is provided on pro-rata basis from / up to the date of such addition / deletion as the case
may be.

4) Impairment of Assets

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to
determine whether there is any indication that those assets suffered an impairment loss. If any such
indication exists, the recoverable amount of the assets is estimated in order to determine the extent

of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in
use. In assessing value in use, the estimated future cash flows expected from the continuing use of
the assets and from its disposal are discounted to their present value using a pre-tax discount rate
that reflects the current market assessments of time value of money and the risks specific to the
assets.

5) Inventories

Inventories consist of Raw Materials and Finished Goods are valued at Cost or Net Realizable
Value, whichever is lower.

6) Investments

Investments are classified into current investments and non-current investments. Current
investments i.e. investments that are readily realizable and intended to be held for not more than a
year valued at cost. Any permanent reduction in the carrying amount or any reversals of such,
reductions are charged or credited to the Statement of Profit & loss Account.

Non-current investments are stated at cost. Provision for dimunintion in the value of these
investments is made only if such decline is other than temporary, in the opinion of the
management.

7) Revenue Recognition

Revenue is recognized when it is probable that economic benefit associated with the transaction
flows to the Company in ordinary course of its activities and the amount of revenue can be
measured reliably, regardless of when the payment is being made. Revenue is measured at the fair
value of consideration received or receivable, taking into the account contractually defined terms
of payments, net of its returns, trade discounts and volume rebates allowed.

Revenue includes only the gross inflows of economic benefits on its own account. Amount
collected on behalf of third parties such as sales tax, value added tax and goods and service tax
(GST) are excluded from the Revenue.

Sale of goods is recognized at the point of dispatch of goods to customers, sales are exclusive of
Sales tax, Vat, GST and Freight Charges if any. The revenue and expenditure are accounted on a
going concern basis.

The capital gains on sale of investment if any are recognized on completion of transaction. No
notional profits/losses are recognized on such investments.

Interst income is recognized on time proportion basis, when it is accured and due for payment.

Dividend from investments in shares / units is recognized when the Companies
right to receive payment is established.

Other items of Income are accounted as and when the right to receive arises.

8) Borrowing Cost

Borrowing Cost includes the interest, commitments charges on bank borrowings, amortization of
ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying
property, plants and equipment’s are capitalized as a part of cost of that property, plants and
equipment’s. The amount of borrowing costs eligible for capitalization is determined in
accordance with the Accounting Standards - 16 “Borrowing Costs”. Other Borrowing Costs are
recognized as expenses in the period in which they are incurred.

In accordance with the Accounting Standard - 16, exchange differences arising from foreign
currency borrowings to the extent that they are regarded as adjustments to interest costs are
recognized as Borrowing Costs, and are capitalized as a part of cost of such property, plants and
equipment’s if they are directly attributable to their acquisition or charged to the Statement or
Profit and Loss.

9) Employee Benefits

Short - term employee benefits are recognized as an expense at the undiscounted amount in the
profit & loss account of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the profit
& loss account for the year in which the liabilities are crystallized.

1. Disclosure under AS - 15 Employee Benefits:

The benefits payable under this plan are governed by "Gratuity Act 1972". Under the Act,
employee who has completed five years of service is entitled to specific benefit. The level of
benefit provided depends on the member''s length of services and salary at retirement age.

The Gratutity has been booked as per the valuation report received from Acturial.

10) Taxes on Income

Income tax expenses for the year comprises of current tax and deferred tax.

Current tax provision is determined on the basis of taxable income computed as per the provisions
of the Income Tax Act.

Deferred tax is recognized for all timing differences that are capable of reversal in one or more
subsequent periods subject to conditions of prudence and by applying tax rates that have been
substantively enacted by the balance sheet date.

11) Foreign Currency Transaction

i. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at
the year end are restated at closing rate.

ii. Any exchange difference on account of settlement of foreign currency transaction and
restatement of monetary assets and liabilities denominated in foreign currency is recognized in
the statement of Profit & loss Account

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Mar 31, 2024

Note 1: Significant Accounting Policies:

1. Basis of Accounting & Revenue Recognition:

The Accounts are prepared under the historical cost convention applying accrual method of accounting and as a going concern, complying with the applicable Accounting Standards and the generally accepted accounting principles prevailing in the country.

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from Operations include sale of goods and supply of services.

Interest income, if any is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

2. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets:

Tangible assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until such assets are ready for use. Capital work in progress comprises the cost of fixed assets that are not yet ready for their intended use at the reporting date.

4. Intangible assets:

Intangible assets acquired separately are measured on initial recognition at cost. The useful lives of intangible assets are assessed as either finite or indefinite.

Following, initial recognition, intangible assets with finite lives are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development

5. Depreciation:

Depreciation has been charged on cost of fixed assets, adopting the following methods / rates:

1. Depreciation is calculated using Written Down Value (WDV) to allocate their cost, net of their residual values, over their estimated useful lives prescribed in Schedule II of the Companies Act, 2013.

2. If the cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately for depreciation.

3. For other assets acquired / sold during the period pro-rata charge has been made from the date of first use or till the date of sale.

6. Impairment:

Impairment loss from fixed assets is assessed as at the close of each financial period and appropriate provision, if required, is considered in the accounts.

7. Segment Information:

The Company operates only in one reportable business segment namely solar projects. Hence, there are no reportable segment under AS - 17. The conditions prevailing in India being uniform no separate geographical disclosures are considered necessary.

8. Borrowing Cost:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized as a part of the cost of such asset up-to the date when such assets are ready for its intended use and other borrowing costs are charged to statement of Profit & Loss.

9. Inventories:

Inventories are valued at the lower of the cost & estimated net realizable value. Cost of inventories is computed on a FIFO basis. Finished goods include costs of conversion & other costs incurred in bringing the inventories to their present location & condition. Proceeds in respect of sale of raw materials/ stores are credited to the respective heads. Obsolete, defective & unserviceable stocks are duly provided for.

10. Sales:

Revenue from sale of goods is recognized on transfer of significant risk and rewards of ownership to buyer that coincides with the delivery of goods. The company present revenue net of sales tax, value added tax and goods and service tax in its Statement of Profit and Loss.

Export incentives on sales under various schemes notified by the Government has been recognized on accrual basis in the year of export. Other incentives and subsidies under various schemes notified by the Government has been recognized on the basis of amount received.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.

11. Retirement benefits:

Short Term Employee Benefits

Short-term employee benefits are recognized as expense in the Statement of Profit & Loss of the year in which the related service is rendered at the undiscounted amount as and when it accrues.

Defined Contribution Plan:

The company is covered under employee’s provident fund and miscellaneous provision Act, 1952 which are defined contribution schemes, liability in respect thereof is determined on the basis of the basis of contribution required to be made under the statues/Rules. Company’s contribution to provident fund is charged to Profit & loss Account.

Defined Benefit Plan: TROM Industries Limited provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees. In accordance with the payment of gratuity Act, 1972 the gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s Salary and the tenure of employment. Liabilities with regard to the gratuity plan are determined by Management Certification as of the balance sheet date, Based upon which, the company contributes all the ascertained liabilities to fund. Trustees administer contributions made to the trust and contributions are invested in specific investment as permitted by Law.

The Company has adopted the Accounting Standard 15 (revised 2005) on Employee Benefits during the restated financials period.