Accounting Policies of Refractory Shapes Ltd. Company

Mar 31, 2025

Significant accounting policies

a) Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Generally Accepted
Accounting Principles (GAAP) in India, to comply with the Accounting Standards specified
under Section 133 of the Companies Act, 2013, read with relevant provisions of the Act, as
applicable. The statements are prepared on an accrual basis and under the historical cost
convention. The accounting policies applied are consistent with those followed in the
previous year, unless otherwise staled. All assets and liabilities have been classified into
current or non-current categories based on the Company''s normal operating cycle and the
criteria specified in Schedule III of the Companies Act, 2013, Considering the nature of its
products and the time between procurement and realization, the Company has identified
its Operating cycle as 12 months for this classification.

b) Use of estimates

The preparation of financial statements Is in conformity with Generally Accepted
Accounting Principles (GAAP) and requires management to make estimates end
assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. The estimates and
assumptions used in the accompanying financial statements are based upon
management''s evaluation of the relevant facts and circumstances as of the date of the
financial statements. Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future periods,

t) Revenue recognition

I) a) Sales ere recorded net of trade discounts, GST, rebates and excise duty. Revenue from
sale of products is recognized when the significant risks and rewards of ownership of the
goods have passed to the buyer. Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the Company and can be reliably measured,

ii) Incones from Rent are recognized as they are rendered based on agreements with the
concerned party.

iii) Interest income is recognized on time proportion basis. Dividend income on investment is
considered when right to receive is established.

d) Inventories

Inventories are valued at the lower of cost and net realizable value in accordance with
Accounting Standard (AS) 1 - Valuation of Inventories. The cost of Raw materials
comprises the purchase price (net of recoverable taxes), duties, freight, and other
expenses incurred in bringing the materials to their present location and condition. Cost is
determined using the First-In, First-Out (FIFO) method. Work-in-progress and Finished
goods are valued at cost, which includes the cost of raw materials, direct labor, and a
proportionate share of production overheads that are systematically allocated based on
normal capacity. The cost also Includes other costs incurred in bringing the inventories to
their present location and condition. Met realizable value is the estimated selling price in
the ordinary course of business, less the estimated cost of completion and the estimated
cost necessary to make the sale. Traded Goods (Spares and Components).Inventories are
measured at the lower of cost and net realisable value. The cost of inventories is based on

e) Retirement benefit to employees

The Company has an obligation towards gratuity, a defined benefit retirement plan
covering eligible employees, The plan provides for lump sum payment to vested
employees at retirement, death while in employment or on termination of employment of
an amount equivalent to 15 days salary payable for each completed year of service
without any monetary limit, Vesting occurs upon completion of five years of service.
Provision for gratuity has been made in the books as per actuarial valuation done as at the
end of the year. The company has a funded plan of gratuity across LIC.

f) Investments

Investments are classified into non current investments and current investments.
Investments which are intended to be held for more than one year arc classified as non
current investments and investments which are intended to be held for less than one year,
are classified as current investments. Non current investments are stated at cost and a
provision for diminution in value of non current investments is made only if the decline is
other than temporary in the opinion of the management. Current investments are valued
at cost or market/fair value whichever is lower. In case of investments in mutual funds,
the net asset value of units is considered as market/fair value.

q) Property Plants & Equipments and depredation

i) All Property, Plant 5. Equipment are recorded at cost including taxes Excluding recoverable
in nature), duties, freight and other incidental expenses incurred to their

acquisition and bringing the asset to its intended use

ii) Insignificant written down value of fixed assets are being written off and debited to profit
& Loss Account,

iii) Depreciable amount of assets is the cost of an asset, or other amount substituted for cost,
less its estimated residual value. Depreciation on tangible fixed assets has been provided
on the straight-fine method as per the useful life prescribed in Schedule 11 to the
Companies Act, 2013,

h) Impairment of assets

i) The Company assesses at each Balance Sheet date whether there is any indication that an
asset may be impaired. If any such condition exists, the company estimates the
recoverable amount of the assets. If such recoverable amount of the asset or recoverable
amount of the cash generating unite to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount The reduction is
treated as an impairment loss and is recognized in the Profit and l oss Account,

i) If at the Balance Sheet date there is an indication that if previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the asset is reflected at
revised recoverable amount

0 Foreion currency transactions

The company has not entered into any Foreign Currency Transactions during the financial
year under consideration.

a) Transactions denominated in foreign currency are normally recorded at the exchange
rate prevailing at the time of transaction.

b) Any income or expenses on account of exchange difference either on settlement or on
translation is recognized in the Profit and Loss account.

c) Monetary items denominated in foreign currencies at the year end are restated at the
year end rates,

d) Mon monetary items denominated in foreign currencies are earned at cost.

il Taxation
0 Current Tax:

Income taxes are accounted for in accordance with Accounting Standard (AS-22) -
"Accounting for taxes on income", notified under Companies (Accounting Standards) Rules,
2021. Income tax comprises of both current and deferred tax. Current tax is measured on
the basis of estimated taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act. 1961

ii) Deferred Tax:

Deferred tax resulting from timing difference between accounting and taxable income is
accounted for using the tax rates and laws that are enacted or substantively enacted on
the balance sheet date* The deferred tax asset Is recognized and carried forward only to
the extent there is a virtual certainty that the asset will be realized in future.

k) Earnings per share

The basic earnings per share is computed by dividing the net profit / loss attributable to
the equity shareholders for the period by the weighted average number of equity shares
outstanding during the reporting period* The number of shares used in computing diluted
earnings per share comprises the weighted average number of shares considered for
deriving earnings per share, and also the weighted average number of equity shares,
which could have been issued on the conversion of all dilutive potential shares.

i) preliminary Expenses:

Preliminary expenses are charged to Profit and Loss Account in the year in which it is
incurred,

m) Cash & Bank Balances

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed 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. Other Bank Balances are short-term balances ( with original maturity is
more than three months but remaining maturity less than twelve months)

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Mar 31, 2024

Significant accounting policies

a) Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (GAAP) and comply with the Accounting Standards as per

^Stf''^ld!,^{fd) Ru,es}’ ^{2006 and the relevant} Provisions of the Companies Act, 2013 to the extent applicable.

b) Use of estimates

The preparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from those fjtur^periods^ ^reV''^SI°^{n t0 accountin}9 estimates is recognized prospectively in current and

c) Revenue recognition

i) a) Sales are recorded net of trade discounts, GST, rebates and excise duty. Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured.

ii) Incomes from Rent are recognized as they are rendered based on agreements with the concerned party.

iii) Interest income is recognized on time proportion basis. Dividend income on investment is considered when right to receive is established.

d) Inventories

Inventories are valued at cost or net realizable value, whichever is lower. Cost is determined on FIFO basis

e) Retirement benefit to employees

Not Applicable

f) Investments

Investments are classified into non current investments and current investments. Investments which are intended to be held for more than one year are classified as non current investments and investments which are intended to be held for less than one year, are classified as current investments. Non current investments are stated at cost and a provision for diminution in value of non current investments is made only if the decline is other than temporary in the opinion of the management. Current investments are valued at cost or market/fair value whichever is lower. In case of investments in mutual funds, the net asset value of units is considered as market/fair value.

g) Fixed assets and depreciation

i) Fixed assets are stated at cost of acquisition and installation less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use.

ii) Insignificant written down value of fixed assets are being written off and debited to profit &

Loss Account.

iii) Fixed assets costing less than Rs 5,000 are fully depreciated in the year of purchase, if any.

h) Impairment of assets

i) The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such condition exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the asset or recoverable amount of the cash generating units to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account.

ii) If at the Balance Sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at revised recoverable amount.

i) Foreign currency transactions

The company has not entered into any Foreign Currency Transactions during the financial year under consideration.

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

b) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account.

c) Monetary items denominated in foreign currencies at the year end are restated at the year end rates.

d) Non monetary items denominated in foreign currencies are carried at cost. fv\