ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Shanti Inorganics Ltd.

CORPORATE INFORMATION:

Shanti Inorgo Chem (Guj) Limited is a company limited by shares domiciled in India and incorporated under the provisions of the Companies Act, 1956, pursuant to a certificate of incorporation dated January 13, 2010 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. The registered office of the Company is located at Plot No -2015, Phase HI G1DC, Vatva, Ahmedabad, Gujarat, India - 382445. The Company is engaged in the business of manufacturing and trading of sulphur based inorganic chemicals.

The name of Company was changed from “Shanti Inorgo Chem (Guj) Limited” to “Shanti Inorganics Limited” consequent to conversion of the Company from private limited company to public limited company with effect from May 06,2025, pursuant to a certificate of incorporation dated March 06,2025 issued by the Registrar of Companies, Ahmedabad, Gujarat.

:.N()TE I: MATERIAL ACCOUNTING POLICIES

'' a) Accounting Conventions:

The Financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India and referred to in section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and generally accepted accounting principles in India. The accounting policies not referred to otherwise have been consistently applied by the Company during __the year,

* Use of Estimates

The preparation of Financial statements in accordance with the GAAP requires management to make estimates and assumptions that may affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities as at the date of Financial statements and the reported amounts of income and expenses during the reporting period. Although the Financial statements have been prepared based on the management’s best knowledge of current events and procedures/actions, the actual results may differ on the final outcome of the matter/transaction to which the estimates relate.

c) Property, Plant & Equipment:

Property, Plant & Equipment are stated at cost of acquisition/construction (less Accumulated Depreciation, if any except land). The cost of Property, Plant & Equipment comprises of their purchase price, including freight, duties, taxes or levies and directly attributable cost of bringing the assets to their working conditions for their intended use. The Company capitalises its Property, Plant & Equipment at a value net of GST credit received/receivablc during the year in respect of Capital Goods. Subsequent expenditures on Property, Plant & Equipment have been capitalised only if such expenditures increase the future benefits from the existing assets beyond their previously assessed standard of performance.

The carrying amounts of items of Property, Plant & Equipment have been eliminated from the books of account on disposal and the profit/(losses) arising from the disposal are recognised in the Statement of Profit and Loss of the period.

The items or class of Property, Plant & Equipment that are under construction/erection or not fully acquired and therefore not available for productive use or intended use are recognized and classified as “Capital Work in Progress” under the head Property, Plant & Equipment and will be capitalized to respective class of property, plant & equipment on completion of the construction/erection/acquisition activities.

The expenditure incurred in connection with the construction/erection of items or class of Property, Plant & Equipment that are not fully available for productive use or intended use and hence recognized and classified as “Capital Work in Progress” and are not specifically allocable to any item or class of property, plant & equipment have been treated recognized as “Pre-Operative Expenses” under the head . “Capital Work in Progress” and will be allocated to respective items of property, plant & equipment on completion of the construction/erection/acquisition activities on the basis of cost of acquisition/construction of respective items or such reasonable basis as considered appropriate allocation of cost.

d) Intangible Assets

intangible assets are recognized at cost when future economic benefits are expected to flow to the Company and the cost can be measured reliably. They are subsequently carried at cost less accumulated amortization and impairment losses, if any. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, while those with indefinite useful lives are tested annually for impairment.

Expenditure incurred on the development or acquisition of identifiable intangible assets that are not yet ready for their intended use is recognized as Intangible Assets under Development. Such assets are carried at cost, comprising directly attributable expenditure incurred in bringing the asset to the condition necessary for its intended use. These assets are not amortized until they are completed and available for use. The carrying amount is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. Upon completion, the accumulated cost is reclassified to the appropriate category of intangible assets, and amortization commences from the date the asset is available for its intended use.

e) Depredation and Amortisation

The Depreciation and amortisation o property, Plant & Equipment and intangible assets sis provided on straight line method for the period of acquisition/construction i.e. from the period from which such assets were available for their intended use on pro-rata basis on the basis of useful life of each of the Property, Plant & Equipment and Intangible assets as per Schedule II of the Companies Act, 2013 and in the manner specified in Schedule 11 of the Companies Act, 2013 except land and other related development on that land.

1) Inventories

Inventories of Raw Materials and work-in-process have been valued at cost. Finished Goods have been valued at cost or net realisable value whichever is lower. Costs in respect of all items of inventories have been computed on FIFO basis. The cost of Raw Materials comprises of the purchase price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition. The purchase price does not include GST credit availed of by the Company during the year. Work-in-process includes cost of Raw Materials and conversion cost depending upon the stage of completion as determined by the management. The cost of Finished Goods includes cost of conversion and other costs incurred in bringing the inventories to their present location and conditions.

g) GST

The GST has been accounted on supply of uoods in accordance with the law relating to GST.

h) Retirement Benefit

The Company''s contribution to Provident Fund & ES1C is charged to the Statement of Profit & Loss of the year.

The Company 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 tennination 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 obtained by the management from registered valuer in this regard as of the balance sheet date.

i) Provisions, Contingent Liabilities and Contingent Assets

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of the Company''s resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure of contingent liabilities is made when there is a possible obligation that may, but probably will not, require an outflow of resources. As a _ measure of prudence, the contingent assets are not recognised.__

j) Revenue Recognition

__All income and expenses are accounted on accrual basis. The Company recognised sale of Goods when

it had transferred the property hi Goods to the buyer for a price or all significant risks and rewards of ownership had been transferred to the buyer and no significant uncertainty existed as to the amount of consideration that would be derived from such sale. The recognition event is usually the dispatch of goods to the buyer such that the Company retains no effective control over the goods dispatched. Income from investments, where appropriate, is taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

Income from investments/security deposits, where appropriate, has been taken into revenue on receipt/credit of the same and tax deducted thereon is treated as advance tax._

k) Foreign Currency Transactions___

The transactions in foreign currency have been recorded using the rate of exchange prevailing on the date of transactions. The difference arising on the settlement/restatement of the foreign currency denominated Current Assets/Current Liabilities into Indian rupees has been recognized as expenses/incomefnet) of the

__year and earned to the statement of profit and loss.____

l) Borrowing Costs

The borrowing costs incurred by the company during the year in connection with the borrowing of funds have been debited to the statement of profit and loss for the period.

The borrowing costs incurred for new project has been capitalized in die cost of the asset upto the date of

put to use of the asset

m) Taxes on Income

The Tax expense comprises of current tax and deferred tax. Provision for current tax is made on the estimated taxable income and at the rate applicable to the relevant assessment year under the Income tax Act, 1961 after considering the available credit of taxes paid in earlier year on the basis of book profit of those years. Deferred income taxes are recognized for future consequences attributable to timing differences between financial determination of income and detennination as of income as per applicable tax laws.

Segment Reporting

The dominant source of income of the company is from the sale of various chemicals which do not materially differ in respect of risk perception and the return realized/to be realized. Even the geographical environment in which the company operates does not materially differ considering the political and economic environment, the type of customers, assets employed and the risk and return associated in respect of each of the geographical area. So, the disclosure requirements pursuant to AS-17 segment Reporting issued by the ICA1 are not applicable to the company.

Investments

Investments that are intended to be held for more than a year from the date when such investments were made, are classified as long term (non-current) investments. The long-term investments are carried at — cost of acquisition. All other investments are classified as current investments and are carried at cost or . market value, whichever is lower.