Accounting Policies of Mahickra Chemicals Ltd. Company

Mar 31, 2025

2 Material Accounting Policies

a Basis of Preparation

These financial statements 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, as applicable. The financial statements have
been prepared under the historical cost convention on accrual basis, except for certain financial
instruments which are measured at fair value.

b. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation / amortisation.
Costs include all expenses incurred to bring the asset to its present location and condition.
Property, Plant and Equipment exclude computers and other assets individually costing Rs. 5000 or
less which are not capitalised except when they are part of a larger capital investment programme.

d Impairment of assets

At each balance sheet date, the management reviews the carrying amounts of its assets included
in each cash generating unit to determine whether there is any indication that those assets were
impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment. 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 asset 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 asset. Reversal of impairment loss is recognised as income in the statement of profit
and loss.

e Investment

Long-term investments and current maturities of long-term investments are stated at cost, less
provision for other than temporary diminution in value. Current investments, except for current
maturities of long-term investments, comprising investments in mutual funds, government securities
and bonds are stated at the lower of cost and fair value.

f Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a
weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried
at the lower of cost and net realisable value. Stores and spare parts are carried at lower of cost and
net realisable value. Finished goods produced or purchased by the Company are carried at lower
of cost and net realisable value. Cost includes direct material and labour cost and a proportion of
manufacturing overheads.

g Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into
known amount of cash that are subject to an insignificant risk of change in value and having original
maturities of three months or less from the date of purchase, to be cash equivalents.

h Revenue recognition

Revenue from the sale of products are recognised upon delivery, which is when title passes to the
customer: Revenue is reported net of discounts.

Dividend is recorded when the right to receive payment is established. Interest income is recognised
on time proportion basis taking into account the amount outstanding and the rate applicable.

i Employee Benefits

Post-employment benefit plans

Contributions to defined contribution retirement benefit schemes are recognised as expense when
employees have rendered services entitling them to such benefits.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit
Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains
and losses are recognised in full in the statement of profit and loss for the period in which they occur.
Past service cost is recognised immediately to the extent that the benefits are already vested, or

amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of
the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the
fair value of scheme assets. Any asset resulting from this calculation is limited to the present value
of available refunds and reductions in future contributions to the scheme.

Other employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the
services rendered by employees is recognised during the period when the employee renders the
service. These benefits include compensated absences such as paid annual leave, overseas social
security contributions and performance incentives.

Compensated absences which are not expected to occur within twelve months after the end of
the period in which the employee renders the related services are recognised as an actuarially
determined liability at the present value of the defined benefit obligation at the balance sheet date.

j Foreign currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date
of the transaction. Foreign currency monetary assets and liabilities other than net investments in
non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet
date and exchange gains and losses are recognised in the statement of profit and loss. Exchange
difference arising on a monetary item that, in substance, forms part of an enterprise’s net investments
in a non-integral foreign operation are accumulated in a foreign currency translation reserve.

k Taxation

Current income tax expense comprises taxes on income from operations in India and in foreign
jurisdictions. Income taxpayable in India is determined in accordance with the provisions of the
Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with
tax laws applicable in countries where such operations are domiciled.

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to
future economic benefits in the form of adjustment of future income tax liability, is considered as
an asset if there is convincing evidence that the Company will pay normal income tax after the tax
holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset
can be measured reliably and it is probable that the future economic benefit associated with it will
fructify.

Deferred tax expense or benefit is recognised on timing differences being the difference between
taxable income and accounting income that originate in one period and is likely to reverse in one or
more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and

tax laws that have been enacted or substantively enacted by the balance sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off¬
setting advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax
paying units and where the Company is able to and intends to settle the asset and liability on a net
basis.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable
right and these relate to taxes on income levied by the same governing taxation laws.

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Mar 31, 2024

1 Company Information

“MAHICKRA CHEMICAL LIMITED referred to as “The Company” is incorporated on 13th November, 2017 under Companies Act 2013 by conversion from Partnership firm to Unlisted Public Limited Company under Companies Act, 2013 and Certificate to that effect, was issued on 13th November, 2017 by Registrar of Companies, Gujarat State at Ahmedabad. It is engaged in Manufacturing & Trading of Dyes & Chemicals. The standalone financial statements for the year ended on 31st March, 2024 are approved by the Board of Directors and authorised for issue on 18th May 2024.”

2 Material Accounting Policies

a Basis of Preparation

These financial statements 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, as applicable. The financial statements have been prepared under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value.

b Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, provision for income taxes, the useful lives of depreciable Property, Plant and Equipment and provision for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognised in the period in which the results are known / materialise.

c. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, less accumulated depreciation / amortisation Costs include all expenses incurred to bring the asset to its present location and condition. Property, Plant and Equipment exclude computers and other assets individually costing Rs. 5000 or less which are not capitalised except when they are part of a larger capital investment programme.

d. Depreciation / amortisation

In respect of Property, Plant and Equipment (other than freehold land and capital work-in-progress) acquired during the year, depreciation/amortisation is charged on a straight line basis so as to writeoff the cost of the assets over the useful lives

Type of Assets	Period
Buildings	30 Years
Plant and Equipment	15 Years
Furniture and Fixtures	10 Years
Vehicles	8 Years
Office equipment	5 Years
Computers	4 Years

e Leases

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis.

f Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. 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 asset and from its disposal are discounted to their present value using a pretax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss.

g Investments

Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds, government securities and bonds are stated at the lower of cost and fair value.

h Revenue recognition

Revenuefromthesaleofequipmentarerecognisedupondelivery,whichiswhentitlepassestothecustomer Revenue is reported net of discounts.

Dividend is recorded when the right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

i Taxation

Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income taxpayable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and liability on a net basis.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

j Foreign currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise’s net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.

k Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at lower of cost and net realisable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

l Provisions, Contingent liabilities and Contingent assets

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

m Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

n Capital work in progress

Expenditure related to and incurred during the implementation of the projects is included under Capital Work-in- Progress and the same are capitalized under the appropriate heads on completion of the projects, if any.

o Borrowing Cost

Borrowing costs include interest, amortization of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction/development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets.

Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

p Cash Flow Statement

The Company has prepared cash flow statement by following an indirect method as per Accounting standard - 3 issued by ICAI.

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

Cash and Cash equivalent mentioned in Balance Sheet and cash flow comprise of Cash on hand, Balance with banks and amount kept as fixed deposit in banks.

q Earning Per Share

i) . 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 equity shares outstanding during the period.

ii) . For the purpose of calculating diluted earnings per share, the net profit or loss for the period

attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

r Segment Reporting

As per the information received from the management the company has only one reportable business and hence segment wise information is not given.

s Government Grants

i) . Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

ii) . Grants relating to PPE in the nature of Project Capital Subsidy are credited to that particular

PPE.

iii) . Others are credited to Statement of Profit and Loss. t Retirement Benefits

i) . Leave Encashment :

Leave Encashment is payable as and when due and to the extent there is contravention of Accounting Standard - 15 “Employee Benefits”, which has become mandatory. However, the quantum of leave encashment payable is not worked out and therefore it is not possible to quantify the effect of the same on profit and loss account.

ii) . Defined Contribution Plans:

These are plans in which the company pays pre-defined amounts to separate funds and does not have any legal or informal obligations to pay additional sums. These comprise of contributions to Employees Provident Fund. The Company’s payment to the defined contributions plans are reported as expenses during the period in which the employees perform the services that the payment covers.

u Current and Non-Current Classification

i) . The Normal Operating Cycle for the Company has been assumed to be of twelve months for

classification of its various assets and liabilities into “Current” and “Non-Current”.

ii) . The Company presents assets and liabilities in the balance sheet based on current and non

current classification.

iii) . An asset is current when it is (a) expected to be realised or intended to be sold or consumed in

normal operating cycle; (b) held primarily for the purpose of trading; (c) expected to be realised within twelve months after the reporting period; (d) Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

iv) . An liability is current when (a) it is expected to be settled in normal operating cycle; (b) it is held

primarily for the purpose of trading; (c) it is due to be discharged within twelve months after the reporting period; (d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

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Mar 31, 2023

A- SIGNIFICANT ACCOUNTING POLICY

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

The accounting principles and policies, recognized as appropriate for measurement and reporting of the financial performance and financial position are follow on accrual basis except as otherwise disclosed, using historical costs (i.e., not taking in to account changing money valuesimpact of inflation) are applied in the preparation of the financial statements and those which are considered materials to the affaires are suitably disclosed. The statement on significant Accounting Standards in respect of which were no materials transactions or where compliance with such standard is not mandatory for the Company.The Financial Statements are in accordance with the requirements of the Companies Act, 2013.

2. USE OF ESTIMATES:-

The preparation of Financial Statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues & expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known /materialized.

3. REVENUE RECOGNITION :-Sale of Goods:

Sales are recognized as and when the risk and reward of ownership is passed to the customer. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding duties or taxes collected on behalf of the government.

Revenue is reduced for rebates and loyalty points granted for purchase and are stated net of returns and discounts wherever applicable.

Other Income:

Incomes in respect of Duty Drawback in respect of exports made during the year are accounted on accrual basis.

Income in respect of MEIS Income & RODTAP Income in respect of Exports made during the year is accounted on accrual basis.

Discount & Kasar-Vatav income from a financial asset is recognized when it is possible that the economic benefits will flow to the Company and the amount of the income can be measured reliably.

Subsidy income is received from Exhibition outside India on a time basis.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

4. INVENTORIES:-

Inventories of Finished Goods are measured at lower of cost and net realizable value whereas inventory of raw materials and stock in process are measured at cost.

Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to make it sale.

5. CASH & CASH EQUIVALENTS:-

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

6. CASH FLOW :-

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and 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.

7. EVENTS OCCURRING AFTER THE BALANCE SHEET :-

Material events occurring after the balance sheet are considered up to the date of approval of the accounts by the board of directors. There are no substantial events having an impact on the results of the current year Balance Sheet.

8. PROPERTY, PLANT AND EQUIPMENT: -

Property, Plant and Equipment are recorded at cost of acquisition with construction cost if any. They are stated at historical cost less accumulated depreciation, amortization and impairment loss, if any. Cost includes expenditures that is directly attributable to the acquisition of the items.

9. DEPRECIATION ON PROPERTY PLANT AND EQUIPMENT:-

Depreciation on tangible fixed assets has been provided on the WDV method as per the useful life prescribed in Schedule II to the Companies Act, 2013.Depreciation on additions/deletion during the year is charged on actual basis from the date of such addition/deletion.

10. CAPITAL WORK-IN-PROGRESS (CWIP)

Project under construction wherein assets are not ready for use in the manner as identified asset for a period of time in exchange for consideration.

11. EMPLOYEE BENEFIT COSTS:-Defined Contribution Plan:

Employee benefits in the form of contribution to Superannuation Fund, Provident Fund managed by Government Authorities, Employees State Insurance Corporation are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.

Defined Benefits Plan:

Retirement benefits in the form of gratuity, post-retirement medical benefit and death & disability benefit are considered as fined benefit obligations and are provided for on the basis of an actuarial valuation using the projected unit credit method, as at the date of the balance sheet. Actuarial Gains / losses. if any, are recognized in the Statement of Profit & Loss.

Employee Benefit, in the form of contribution to Provident Fund managed by a Trust set up by the Company, is charged to statement of profit and loss as and when the contribution is due. The deficit, if any, in the accumulated corpus of the trust is recognized in the statement of profit and loss based on actuarial valuation.

12. BORROWING COST:-

Borrowing costs that are directly attributable to the acquisition, construction or production of fixed assets are considered as part of the cost of that asset till the date of the acquisition. Other borrowing costs are recognized as an expense in the period in which they are incurred.

13. EARNING PER SHARE:-

Basic earning per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earning per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potentially equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits/reverse share splits and bonus shares, as appropriate.

14. IMPAIRMENT OF ASSETS:-

The Management periodically assesses, using external and internal sources whether there is an indication that an assets may be impaired If an asset is impaired, the Company recognizes impairment loss as the excess of carrying amount of the assets over recoverable amount.

15. TAXES ON INCOME:-

Tax Expenses for the year, i.e. Current Tax is included in determining the net profit for the year. A provision is made for the current tax liability computed in accordance with relevant tax rates and tax laws.

16. DEFERRED TAX-ASSET/LIABILITY:-

The Accounting Standard 22 “Accounting for Taxes on Income “issued by the Institute of Chartered Accountants of India is applicable to the Company. The Deferred Tax is recognized for all timing differences being the difference between “taxable Income “and “accounting Income” that originate in one period, and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates. Deferred Tax Assets are recognized to the extent reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.

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Mar 31, 2018

1. Basis of preparation of Financial Statements:-

The accounting principles and policies, recognized as appropriate for measurement and reporting of the financial performance and financial position on accrual basis except as otherwise disclosed, using historical costs (i.e. not taking in to account changing money values impact of inflation) are applied in the preparation of the financial statements and those which are considered materials to the affaires are suitably disclosed. The statement on significant. Accounting Standards in respect of which were no materials transactions or where compliance with such standard is not mandatory for the companies Act, 2013.

2. Use of Estimates:-

The preparation of Financial Statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues & expensed during the reporting period. Difference between actual results and estimated are recognized in the period in which the results are known/materialized.

3. Inventories:-

Inventories of Finished Goods are measured at lower of cost and net realizable value. Whereas inventory of raw materials and stock in process are measured at cost.

Cost included direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to make it sale.

4. Cash and Cash Equivalents:-

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

5. Cash Flow:-

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and 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.

6. Events occurring after the Balance Sheet:-

Material events occurring after the balance sheet are considered up to the date of approval of the accounts by the board of directors. There are no substantial events having an impact on the results of the current year Balance Sheet.

7. Tangible Fixed Assets:-

Fixed assets are stated at cost of acquisition including any cost attributable to bringing the assets to their working conditions for their intended use.

8. Depreciation on Tangible Fixed Assets:-

Depreciation on Tangible fixed assets has been provided on the WDV method as per the usefull prescribed in Schedule II to the Companies Act, 2013.

9. Revenue Recognition:-

Sale of Goods:-

Sales are recognised as and when the risk and reward of ownership is passed to the customer. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding duties or taxes collected on behalf of the government.

Revenue is reduced for rebated and loyalty points granted purchase and are stated net of returns and discounts wherever applicable.

Other Income:

Interest income from a financial asset is recognized when its possible that the economic benefits will flow to the Company and the amount of the income can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

10. Employee benefits costs:-

Defined Contribution Plan:

Employee benefits in the form of contribution to Superannuation Fund, Provident Fund Managed by Government Authorities, Employees State Insurance Corporation are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.

Defined Benefits Plan:

Retirement benefits in the form of gratuity, post-retirement medical benefit and death and disability benefit are considered as fined benefit obligations and are provided for on the basis of an actuarial valuation using the projected unit credit method, as at the date of the balance sheet. Actuarial gains/losses. If any, are recognized in the statement of profit and loss.

Employee Benefit in the form of contribution to Provident Fund Managed by a Trust set up by the Company, is charged to statement of profit and loss as and when the Contribution is due. The deficit, if any, in the accumulated corpus of the trust is recognized in the statement of profit and loss based on actuarial valuation.

11. Borrowing Cost:-

Borrowing Costs that are directly attributable to the acquisition, construction or production of fixed assets are considered as part of the cost of that asset till the date of the acquisition. Other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Earning per share:-

Basic earning per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items. If any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the Profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earning per share and the weighted average number of equity share which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease that net profit per share from continuing ordinary operations. potential dilutive equity shares are deemed to be converted as the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potentially equity shares are determined independently for each period presented. The number of equity shares and Potentially dilutive equity shares are adjusted for share splits/reverse share splits and bonus shares, as appropriate.

13. Taxes on Income:-

Tax Expenses for the year. i.e. Current Tax is included in determining the net profit for the year. A provision is made for the current tax liability computed in accordance with relevant tax rates and tax laws.

14. Deferred Tax-Asset/Liability:-

The Accounting Standard 22 “Accounting for Taxes on income” issued by the Institute of Chartered Accountants of India is applicable to the Company. The Deferred Tax is recognize for all timing differences being the difference between “ Taxable Income” and “accounting Income” that originated in one period, and are capable of reversal in one of more subsequent periods and measured using relevant enacted tax rates. Deferred Tax Assets are recognized to the extent reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.

15. Impairment of assets:-

The Management Periodically assesses, using external and internal sources whether there is an indication that an assets may be impaired if an asset is impaired, the company recognizes impairment loss as the excess of carrying amount of the assets over recoverable amount.

16. Operating Segment:-

The Company operate in a single segment i.e. manufacturing and trading of Reactive Dyes. Therefore separate segment report is not prepared.

17. Foreign Currency Transaction:-

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Differences arising out of foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

Monetary items outstanding at the balance sheet date and denominated in foreign currencies are recorded at the exchange rate prevailing at the end of the year. Difference arising there form are recognized in the statement of Profit and Loss.

18. Provisions, Contingent Assets and Contingent Liabilities:-

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and its probable that there will be an outflow of resources. Contingent liabilities, if any, are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.