Accounting Policies of Syschem (India) Ltd. Company

Mar 31, 2025

2. Summary of material accounting policies
2.1 Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS)
under the historical cost convention on the accmal basis, the provisions of the Companies Act ,
2013 (''Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of
India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the
Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016.

Effective from 01^st April, 2017, the Company has adopted all the Ind AS standards and the
adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting
Standards. The transition was earned out from Indian Accounting Principles generally accepted in
India as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the
Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

All assets and liabilities have been classified as current or non-current as per the Company’s
normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
Based on the nature of products and the time between the acquisition of assets for processing and
their realization in cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose of current - non-current classification of assets and liabilities.

2.2 Property'', Plant & Equipments and Intangible Assets

Property, Plant & Equipments are stated at acquisition cost, net of accumulated depreciation and
accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset
are added to its book value only if they increase the future benefits from the existing asset beyond
its previously assessed standard of performance.

Items of fixed assets that have been retired from active use and are held for disposal are stated at
the lower of then net book value and net realizable value and are shown separately in the financial
statements. Any expected loss is recognized immediately in the Statement of Profit and Loss.

Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets
which are carried at cost are recognized in the Statement of Profit and Loss.

Depreciation is provided on the Straight Line Method over the useful life of the assets as
prescribed under Schedule II Part C of the Companies Act, 2013. Depreciation on assets sold
during the year is provided upto the date of sale of fixed assets.

Intangible Assets

Cost of development in case of self generated asset is recognized on the basis of actual cost
incurred and directly attributable expenses incurred thereon.

2.5 Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale. All other borrowing costs are
recognized in Statement of Profit and Loss in the period in which they are incurred.

2.4 Impairment

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset
may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows
from other assets or groups of assets, is considered as a cash generating unit. If any such indication
exists, an estimate of the recoverable amount of the asset/cash generating unit is made. Assets
whose carrying value exceeds then recoverable amount are written down to the recoverable
amount. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and
its value in use. Value in use is the present value of estimated future cash flows expected to arise
from the continuing use of an asset and from its disposal at the end of its use fill life. Assessment is
also done at each Balance Sheet date as to whether there is any indication that an impairment loss
recognized for an asset in prior accounting periods may no longer exist or may have decreased.

2.5 Revenue Recognition

As per the requirements of the Companies (Amendment) Act, 1988, all expenses and income are
generally accounted for on accrual basis.

2.6 Current and deferred tax

Tax expense for the period, comprising current tax and deferred tax, are included in the
determination of the net profit or loss for the period. Current tax is measured at the amount
expected to be paid to the tax authorities in accordance with the taxation laws prevailing. Deferred
tax is recognized for all timing differences, subject to the consideration of prudence in respect of
deferred tax assets.

Deferred tax assets in respect of timing differences on account of unabsorbed business loss and
unabsorbed depreciation as per Income tax laws, are recognized and carried forward only to the
extent that there is a virtual certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets in respect of timing differences, other than unabsorbed business loss and
unabsorbed depreciation as per Income tax laws, are recognized and carried forward only to the
extent that there is a reasonable certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.

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. At each Balance Sheet date, the
Company reassesses unrecognized deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to
set off the recognized amoimts and there is an intention to settle the asset and the liability on a net
basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable
right to set off assets against liabilities.

Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is
convincing evidence that the company will pay normal income tax during the specified period.
Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset
is written down to the extent there is no longer a convincing evidence to the effect that the
Company will pay normal income tax during the specified period.

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Mar 31, 2024

1. Company’s Overview

Syschem India Limited (the ‘Company’) was incorporated on 31.12.1993 and is engaged in production of Active Pharmaceuticals Ingredients (APIs) and bulk drugs. The Shares of the Company are listed on BSE Limited.

2. Summary of material accounting policies

2.1 Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis, the provisions of the Companies Act , 2013 (''Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Effective from 01^st April, 2017, the Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.

2.2 Property, Plant & Equipments and Intangible Assets

Property, Plant & Equipments are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realizable value and are shown separately in the financial statements. Any expected loss is recognized immediately in the Statement of Profit and Loss.

Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognized in the Statement of Profit and Loss.

Depreciation is provided on the Straight Line Method over the useful life of the assets as prescribed under Schedule II Part C of the Companies Act, 2013. Depreciation on assets sold during the year is provided upto the date of sale of fixed assets.

Intangible Assets

Cost of development in case of self generated asset is recognized on the basis of actual cost incurred and directly attributable expenses incurred thereon.

2.3 Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.

2.4 Impairment

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

2.5 Revenue Recognition

As per the requirements of the Companies (Amendment) Act, 1988, all expenses and income are generally accounted for on accrual basis.

2.6 Current and deferred tax

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing. Deferred tax is recognized for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.

Deferred tax assets in respect of timing differences on account of unabsorbed business loss and unabsorbed depreciation as per Income tax laws, are recognized and carried forward only to the extent that there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets in respect of timing differences, other than unabsorbed business loss and unabsorbed depreciation as per Income tax laws, are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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. At each Balance Sheet date, the Company reassesses unrecognized deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities.

Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

2.7 Provisions and Contingent Liabilities

Provisions: Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

2.8 Inventories

The stocks of raw materials and stores & spares are valued at cost price. Finished Goods have been valued at cost or net realizable value whichever is lower. Cost includes purchase price, freight inward, clearing charges, custom duty and other related expenses. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Work in progress is valued at estimated cost. Goods in transit are carried at cost.

2.9 Earnings Per Share

Basic earnings per share is 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. Earning considered in ascertaining the Company’s earnings per share is the net profit for the period after deducting taxes thereto for the period. The weighted average number of Equity Shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential Equity Shares that have changed the number of Equity Shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.10 Employee Benefits

The contribution to provident fund, under the defined contribution plans is charged to revenue. The Company has also provided towards the Gratuity benefits and Leave encashment, of the eligible employees. No provision is made towards bonus during the year. The provisions for the above benefit relating to the current year are charged to the revenue.

2.11 Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency, and the foreign currency at average rate at each month.

Conversion -

Foreign currency monetary items are reported using the closing rate. Non-Monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction.

Exchange Differences -

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements are recognized as income or as expense in the year in which they arise.

2.12 Leases

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

? fixed payments (including in-substance fixed payments), less any lease incentives receivable

? amounts expected to be payable by the Company under residual value guarantees

? the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and

? payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

2.13 Cash and Cash equivalents

Cash and cash equivalents at the end of the year represent cash and deposit with banks. The cash flow statement is made using the indirect method.

3. Other Notes and disclosures:

3.1 The management has certified cash in hand as on 31^st March, 2024.

3.2 Deferred tax resulting from “timing difference” between books and taxable profits is recognized using tax rates and laws that have been enacted as on Balance Sheet date.

3.3 The balance of Security Deposits and Advances recoverable are subject to the confirmation of the parties.

3.4 In the opinion of the Board of Directors, current assets and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

3.5 In terms of notification no. G.S.R. 719(E) dated November 16, 2007 issued by the Central Government of India, the disclosure of payments due to any supplier as at March 31, 2024 are as follows:

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Mar 31, 2014

1) BASIS OF ACCOUNTING

The accompanying financial statements are prepared under the historical cost conventions following accrual basis of accounting. Accounting policies not specifically referred to otherwise are consistent and is consonance with generally accepted accounting principles.

2) REVENUES RECOGNITION

The incomes and expenditures are accounted for on accrual basis. The sales are net of returns and inclusive of applicable excise duties.

3) FIXED ASSETSAND DEPRECIATION

The fixed assets are stated at historical cost less depreciation. The cost includes the cost of purchase or construction together with interest of borrowing for the purpose of acquiring fixed assets up to the date of commissioning of fixed assets and other incidental expenses incurred up to that date. Depreciation has been provided on straight-line method at the rates provided in Schedule xiv of the Companies Act, 1956.

4) EXCISE DUTY

CENVAT credits are taken into account at the time of purchase of Capital Goods and raw materials, to the credit of respective purchases and utilized for the clearance of goods manufactured. Expenditure in respect of excise duty on finished products is accounted for as and when the clearance is made from factory premises. The amount of excise duty payable on the finished goods, not cleared from the factory as at 31st March 2014, has not been added to the value of closing stocks of finished goods. However, the non-provision of such excise duty will not effect the profits for the year.

5) BORROWING COSTS

Borrowing costs attributable to the acquisition, construction or production of an asset is capitalized as part of the cost of that asset. The borrowing costs, which are not related to fixed assets, are recognized as an expense in the period in which they are incurred.

6) INVENTORIES

The stocks of Raw Material and Stores & Spares are valued at cost price. The Finished Goods have been valued at cost or net realizable value whichever is less, work- in process is valued at estimated cost as certified by management. Goods in transit are carried at cost.

7) EMPLOYEE TERMINAL BENEFITS

The contribution to provident fund, under the defined contribution plans is charged to revenue. The Company has also provided towards the Gratuity benefits, of the eligible employees. No provision is made towards bonus during the year. The provisions for the above benefit relating to the current year are charged to the revenue.

8) INCOME TAXES

a. Provision for taxation has been made on the basis of taxable profits computed for the current accounting year in accordance with the provisions of the Income TaxAct, 1961.

b. Deferred income tax is provided using the asset method on all timing differences at the balance sheet date between the tax base of assets all liabilities and their carrying amounts forfinancial reporting purposes.

C. Deferred tax assets and liabilities are measured using the tax laws that have been enacted or subsequently enacted at the balance sheet date.

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Mar 31, 2012

1) BASIS OF ACCOUNTING

The accompanying financial statements are prepared under the historical cost conventions following accrual basis of accounting. Accounting policies not specifically referred to otherwise are consistent and is consonance with generally accepted accounting principles.

2) REVENUES RECOGNITION

The incomes and expenditures are accounted for on accrual basis. The sales are net of returns and inclusive of applicable excise duties.

3) FIXED ASSETS AND DEPRECIATION

The fixed assets are stated at historical cost less depreciation. The cost includes the cost of purchase or construction together with interest of borrowing for the purpose of acquiring fixed assets up to the date of commissioning of fixed assets and other incidental expenses incurred up to that date. Depreciation has been provided on straight-line method, on single shift basis, at the rates provided in Schedule XIV of the Companies Act, 1956.

4) EXCISE DUTY

CENVAT credits are taken into account at the time of purchase of Capital Goods and Raw Materials, to the credit of respective purchases and utilised for the clearance of goods manufactured. Expenditure in respect of excise duty on finished products is accounted for as and when the clearance is made from factory premises. The amount of excise duty payable on the finished goods, not cleared from the factory as at 31st March 2012, has not been added to the value of closing stocks of finished goods. However, the non-provision of such excise duty will not effect the profits for the year.

5) BORROWING COSTS

Borrowing costs attributable to the acquisition, construction or production of an asset is capitalized as part of the cost of that asset. The borrowing costs, which are not related to fixed assets, are recognized as an expense in the period in which they are incurred.

6) INVENTORIES

The stocks of Raw Material and Stores & Spares are valued at cost price. The Finished Goods have been valued at cost or net realizable value whichever is less, work- in process is valued at estimated cost as certified by management. Goods in transit are carried at cost.

7) EMPLOYEE TERMINAL BENEFITS

The contribution to provident fund, under the defined contribution plans is charged to revenue. The Company has also provided towards the Gratuity benefits and Leave Encashment, of the eligible employees. No provision is made towards bonus during the year. The provisions for the above benefit relating to the current year are charged to the revenue.

8) INCOME TAXES

a. Provision for taxation has been made on the basis of taxable profits computed for the current accounting year in accordance with the provisions ofthe Income Tax Act, 1961.

b. Deferred Income Tax is provided using the asset method on all timing differences at the balance sheet date between the tax base of assets all liabilities and their carrying amounts for financial reporting purposes.

c. Deferred Tax Assets are recognized only to the extent that there is reasonable / virtual certainty of their realization.

d. Deferred Tax Assets and Liabilities are measured using the tax laws that have been enacted or subsequently enacted at the balance sheet date.