ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Merritronix Ltd.

I. Significant Accounting PoliciesA. Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the generally
accepted accounting principles in India to comply with the Accounting Standards specified under Section 133 of
the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of
the Companies Act, 2013.

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 of 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.

B. Property, Plant and Equipment

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its
purchase price including import duties and non-refundable purchase taxes after deducting trade discounts,
rebates and any directly attributable cost of bringing the item to its working condition for its intended use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance cost are charged to the standalone
statement of profit and loss during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net
disposal proceeds and the carrying value of property, plant and equipment and are recognized in the statement of
profit and loss when the same is derecognized.

Depreciation is calculated on pro rata basis on straight-line method based on estimated useful life prescribed
under Schedule II of the Companies Act, 2013. Freehold land is not depreciated.

C. Impairment of Assets:

The carrying amount of assets are reviewed at each balance sheet date to determine if there is any indication of
impairment based on internal / external factors. An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value, i.e.net selling price or value in use, whichever is higher. An impairment loss, if any, is
charged to Profit and Loss account in the year in which the asset is identified as impaired

D. Inventories

a) Raw Material and Components : Lower of cost or net realizable value

b) Work in Progress : Lower of cost or net realizable value

c) Finished Goods : Lower of cost or net realizable value

E. Revenue Recognition

Revenue is recognized to the extent that it is probable that, the economic benefits will flow to the Company and the
revenue can be reliably estimated and collectability is reasonably assured.

Revenue from sale of goods is recognised when control of the products being sold is transferred to our customer
and when there are no longer any unfulfilled obligations. The Performance Obligations in our contracts are fulfilled
at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any
taxes or duties collected on behalf of the Government such as goods and services tax, etc. Accumulated experience
is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is
highly probable a significant reversal will not occur.

F. Taxes on Income:

Current Tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference
between the taxable income and accounting income that originate in one period and is capable of reversal in one
or more subsequent periods.

G. Employees Benefits :a) Defined Contribution Plans:

The company has defined contribution plans for employees comprising of Government administered
employees state insurance and provident fund. Contribution to the Provident Fund / ESI to appropriate
authorities is made periodically and is charged to the profit & loss account statement on accrual basis.

b) Defined benefit plans:

Gratuity:Provision for gratuity is made on accrual basis, on the basis of completed years of service as
prescribed under the Payment of Gratuity Act, 1972.

H. Foreign Exchange Transactions:

Foreign exchange transactions are recorded at the rate prevailing on the date of the respective transaction.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the
closing exchange rates on that date. 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 the transaction. Exchange differences
arising on foreign exchange transactions settled during the year and on restatement as at the balance sheet date
are recognized in the statement of profit and loss for the year.

I. Income Taxes

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the
income-tax law) and deferred tax charge or credit effects of timing differences between accounting income and
taxable income for the period). Income-tax expense is recognised in profit or loss except that tax expense related
to items recognised directly in reserves is also recognised in those reserves.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using
the applicable tax rates and tax laws. Deferred tax is recognised in respect of timing differences between taxable
income and accounting income i.e. differences that originate in one period and are capable of reversal in one or
more subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets
are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance
sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can
be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if 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 realised. Deferred
tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realised.

Minimum Alternative Tax (‘MAT’) under the provisions of the Income-tax Act, 1961 is recognised as current tax
in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognised as
an asset only when and to the extent there is convincing evidence that the company will pay normal income tax
during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT
credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid
convincing evidence no longer exists.