2. SIGNIFICANT ACCOUNTING POLICIESa. ACCOUNTING CONVENTION:

i. The financial statements of the company 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, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013
(“the 2013 Act”) /Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements
have been prepared on accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are consistent with those
followed in the previous year.

ii. The Balance Sheet and Statement of Profit and Loss have been prepared in accordance
with Division II of Schedule III to the Companies Act, 2013, to the extent applicable to the
Company.

iii. The financial statements are prepared on a going concern basis as the Management is
satisfied that the Company shall be able to continue its business for the foreseeable future
and no material uncertainty exists that may cast significant doubt on the going concern
assumption. In making this assessment, the Management has considered a wide range of
information relating to present and future conditions, including future projections of
profitability, cash flows and capital resources.

iv. The financial statements are presented in Indian Rupees and all amounts are rounded off
to lakhs, unless otherwise stated.

b. PROPERTY, PLANT AND EQUIPMENT (PPE):

i) An item of property, plant and equipment (PPE'') is recognised as an asset if it is probable
that the future economic benefits associated with the item will flow to the Company and its
cost can be measured reliably.

ii) These recognition principles are applied to the costs incurred initially to acquire an item of
PPE, to the pre-operative and trial run costs incurred (net of sales), if any and also to the
costs incurred subsequently to add to, replace part of, or service it and subsequently carried
at cost less accumulated depreciation and accumulated impairment losses, if any.

iii) The cost of PPE includes interest on borrowings directly attributable to the acquisition,
construction or production of a qualifying asset. A qualifying asset is an asset that necessarily
takes a substantial period of time to be made ready for its intended use or sale. Borrowing
costs and other directly attributable cost are added to the cost of those assets until such
time as the assets are substantially ready for their intended use, which generally coincides
with the commissioning date of those assets.

iv) Machinery spares that meet the definition of PPE are capitalised and depreciated over the
useful life of the principal item of an asset.

v) PPE are stated at cost, net of GST and depreciation. No specific borrowing is incurred to
increase the fixed assets so no interest on borrowing is capitalized in fixed assets during
the current financial year. Building includes road, staff quarters, security room, gate,
compound wall etc.

vi) Company maintains a separate and special in-house research laboratory for the
development, expansion and invention of new and innovative techniques for easy and speedy
process of output, for maintenance of quality of products and also to search out new products
for the betterment and expansion of business.

De-recognition

vii) An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in the Statement of Profit and Loss when
the asset is derecognized.

c. INTANGIBLE ASSETS / SOFTWARE

i) The Company measures intangible assets, representing softwares, licenses etc. initially at
cost and subsequently at cost less accumulated amortisation and accumulated impairment,
if any.

ii) The Company recognises internally generated intangible assets when the Company is
certain that intangible assets would support/result in furtherance of Company''s existing
and/or new business and cost of such intangible asset identifiable and reliably measurable.
The cost of an internally generated intangible asset comprises of all directly attributable
costs necessary to create, produce, and prepare the asset to be capable of operating in the
manner intended by the Company.

iii) All the intangible assets including those internally generated are amortised using the straight¬
line method over a period of life estimated for each such asset, which is the Management''s
best estimate of its useful life.

iv) An intangible asset is derecognised on disposal, or when no future economic benefits are
expected from use or disposal. Gains or losses arising from derecognition of an intangible
asset, measured as the difference between the net disposal proceeds and the carrying
amount of the asset are recognised in the Statement of Profit and Loss when the asset is
derecognised.

v) Intangible assets, including software, are stated at cost, less accumulated amortisation
and impairment loss, if any. Software is amortised over its estimated useful life as assessed
by the Management.

vi) Depreciation on tangible assets is provided on the Straight-Line Method as per the useful
life prescribed in Schedule II to the Companies Act, 2013.

d. IMPAIRMENT OF ASSETS

At each balance sheet date, the Management reviews the carrying amount of assets to determine
whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the asset is estimated. Impairment loss, if any, is recognised where the carrying
amount of an asset exceeds its recoverable amount.

e. Depreciation:

Depreciation on fixed assets, has been provided in the accounts as per schedule II of the
Companies Act, 2013. Depreciation on fixed assets is provided on Straight line method value
method. It has been charged pro-rata from the date of additions as per Schedule II of the
Companies Act, 2013.

Residual value of all the assets is taken at 5%.Additions made in the plant and machinery during
the year are grouped on date wise basis for computation of prorate depreciation.

f. INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined on FIFO or
specialized basis, if applicable. The raw material cost includes purchase cost and other cost to

bring the material at factory. The work in progress and finished goods cost includes raw material
cost, variable cost and manufacturing overheads.

g. SALES:

Sales value is net off GST as applicable and other rebate & claims if any. Sales are accounted for
on dispatch of goods to the customers and are net of sales return.

h. TREATMENT OF RETIREMENT OF BENEFITS:

(i) Short-Term Employee Benefits

Liabilities for salaries and wages, including non-monetary benefits and accumulating leave
balance in respect of employees'' services up to the end of the reporting period, are recognized
as expensed when the liabilities are settled.

The company also recognizes a liability and records an expense for bonuses (including
performance-linked bonuses) where contractually obliged or where there is a past practice
that has created a constructive obligation.

(ii) Defined Benefit Obligation
Gratuity

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the
Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of
service is entitled to specific benefit. The level of benefits provided depends on the member''s
length of service and last drawn salary.

i. FOREIGN CURRENCY TRANSACTIONS:

i. ) Monetary items denominated in foreign currency are translated at the exchange rate prevailing

on the last day of the accounting year. Foreign currency transactions are accounted at the
prevailing on the date of transaction.

ii. ) 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.

iii. ) Gain or loss arising out of translation/conversation is taken credit for or charged to the profit

and loss statement.

j. BORROWING COSTS:

Borrowing costs relating to acquisition of qualifying assets is capitalized till the date of commercial
use of such assets. A qualifying asset is one that necessarily takes substantial period of time to
get ready for intended use. Other borrowing costs are charged to profit and loss account.

1. CORPORATE INFORMATION

Technichem Organics Limited (The company) is a public limited company which was initially registered
as a private limited company with Registrar of Companies, Gujarat with CIN number
U24231GJ1996PTC028917 Since 27.02.1996 and engaged in the business of manufacturing and
trading of Chemicals having registered office at 5th Floor, Malak Complex, Behind Old Gujarat High
Court, Navrangpura, Ahmedabad, Gujarat, India, 380009 and factory address at Survey No. 347,
Village: Lunej, Tal. Khambhat, Dis. Anand, Gujarat.

From 4th day of July 2024, the company Technichem Organics Pvt. Ltd. is converted into a Public
Limited company limited by shares under section 18 of the company''s act 2013 and so the name of
the company is changed to TECHNICHEM ORGANICS LIMITED from the same date.

During the financial year, the company successfully completed the process of listing its equity shares
on the SME Platform of [BSE SME] in accordance with the applicable provisions of the Companies Act,
2013 and SEBI (ICDR) Regulations, 2018.

The company made an Initial Public Offering (IPO) of 45,90,000 equity shares of face value Rs. 10/-
each at an issue price of Rs. 55/- per share, aggregating to Rs. 2524.50 Lacs.

The shares were listed on the [SME Platform of BSE] and trading commenced on 07^th January 2025

The financial statements were authorized for issue in accordance with a resolution of the Board of
directors on 28^th May 2025.

2. SIGNIFICANT ACCOUNTING POLICIES

a. ACCOUNTING CONVENTION:

The financial statements of the company 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, read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”)
/Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been prepared
on accrual basis under the historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those followed in the previous year.

b. PROPERTY, PLANT AND EQUIPMENT (PPE):

i) The Gross Block of PPE is stated at cost Net of GST. Cost comprises of purchase price and
other attributable expenses.

ii) The carrying amount of cash generating assets is reviewed at balance sheet date to
determine whether there is any indication of impairment, if any such indication exists, the
recoverable amount is estimated as the higher of net selling price and value in use.
Impairment loss is recognized wherever carrying amount exceeds recoverable amount.

iii) Depreciation amount for assets is the cost of an asset, or other amount substituted for cost,
less its estimated residual value.

iv) Depreciation on tangible assets is provided on the Straight Line Method as per the useful
life prescribed in Schedule II to the Companies Act, 2013.

c. INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined on FIFO or
specialized basis, if applicable. The raw material cost includes purchase cost and other cost to
bring the material at factory. The work in progress and finished goods cost includes raw material
cost, variable cost and manufacturing overheads.

d. SALES:

Sales value is net off GST as applicable and other rebate & claims if any. Sales are accounted for
on dispatch of goods to the customers and are net of sales return.

e. TREATMENT OF RETIREMENT OF BENEFITS:

(i) Short-Term Employee Benefits

Liabilities for salaries and wages, including non-monetary benefits and accumulating leave
balance in respect of employees'' services up to the end of the reporting period, are recognized
as expensed when the liabilities are settled.

The company also recognizes a liability and records an expense for bonuses (including
performance-linked bonuses) where contractually obliged or where there is a past practice
that has created a constructive obligation.

(ii) Defined Benefit Obligation
Gratuity

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the
Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of
service is entitled to specific benefit. The level of benefits provided depends on the member''s
length of service and last drawn salary.

f. FOREIGN CURRENCY TRANSACTIONS:

i. ) Monetary items denominated in foreign currency are translated at the exchange rate prevailing

on the last day of the accounting year. Foreign currency transactions are accounted at the
prevailing on the date of transaction.

ii. ) 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.

iii. ) Gain or loss arising out of translation/conversation is taken credit for or charged to the profit

and loss statement.

g. BORROWING COSTS:

Borrowing costs relating to acquisition of qualifying assets is capitalized till the date of commercial
use of such assets. A qualifying asset is one that necessarily takes substantial period of time to
get ready for intended use. Other borrowing costs are charged to profit and loss account.

1. CORPORATE INFORMATION

The company is currently engaged in manufacturing and trading of chemicals.

Registered Office.

S* Floor, Malak Complex,

B/h Old High Court.

Ahmedabad 330009

2. SIGNIFICANT ACCOUNTING POLICIES

a, (r) Basis of preparation of financial statements

The Financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India. The applicable mandatory Accounting standards prescribed under section 133 of the companies Act, 2013 (“Acf) read with Rule 7 of the companies (Accounts) Rules, 2014, as amended and other relevant provisions of the Ac! have been followed in preparation of these financial statements,

(ii) Use of Estimates

The Preparation of financial statements requires the management to make estimates and assumptions that affeci the reported amount of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the reported amount of revenues and expenses during the reporting period Management believes that these estimates snd assumptions are reasonable and prudent, However, actual result could differ from estimates, Differences between the actual result and the estimates are recognized in the period in which the same are knownfm a legalized

{ill) 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 schedule III to the companies Act, 2013, The company has ascertained its operating cycle as 12 months for the purpose of current or noncurrent classification of assets and liabilities.

h. PROPERTY. PLANT 5 EQUtPMENTi

i) The Gross Block of Property, Plant & Equipment is stated at cost Net of GST, Cost comprises of purchase price and other attributable expenses u) The carrying amount of cash generating assets is reviewed at balance sheet dale to determine whether there is any indication of impairment, if any such indication exists, the recoverable amount is estimated as the higher of nel selling price and

f v *

value in use Impair men! loss is recognised wherever carrying a mo uni exceeds

F''TW

recoverable amount

lii) Depreciation amount for assets is Ihe cost of an asset, or other amount substituted for cost, less its estimated residual value.

iv) Depreciation on tangible assets is provided on the Straight Line Method as per Ihe useful life prescribed in Schedule 1J to the Companies Act, 2013.

c. INVENTORIES

Inventories are valued at tower of cost or net realizable value Cost rs determined on FIFO or specialized basis, if applicable. The raw material cos! includes purchase cost and other cost to bring the material at factory. The work in progress and fmished goods cost includes raw material cost, variable cost and manufacturing overheads

d. SALES:

Sales value is net off GST as applicable and other rebate & claims if any Sales are accounted for on dispatch of goods to the customers and are net of sales return.

e. TREATMENT OF RETIREMENT OF BENEFITS:

{i) Short-Term Employee Benefits

Liabilities for salaries and wages, Including non-monetary benefits and accumulating leave balance in respect of employees'' services up to the end of the reporting period, are recognized as expensed when the liabilities are settled

The company also recognizes a liability and records an expense for bonuses (including performance-linked bonuses) where contractually obliged or where there is a past practice that has created a constructive obligation

(it) Defined Benefit Obligation

Gratuity

The Company has a defined benefit gratuity plan The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act. employee who has comptetod five years of service is entitled to specific benefit The level of benefits provided depends on the member''s length of service and last drawn salary

f. FOREIGN CURRENCY TRANSACTIONS:

i } Monetary items denominated in foreign currency are translated a! Ihe exchange rale prevailing on the fas! day of the accounting year Foreign currency transactions are accounted at the prevailing on the dare of transaction ji) Non-monetary items which are carried m terms of historical cosl denominated in a foreign currency are reported using the exchange rale at the date of transaction iii.J Gain or toss arising out of Iranslationfconversation is taken credit for or charged to ihe profit and loss statement

g. BORROWING COSTS:

Borrowing costs relating to acquisition of qualifying assets is capitalized till the date of commercial use of such assets A qualifying asset is one that necessarily fakes substantial period of time to get ready for intended use Other borrowing costs are charged to profit and loss account

h. PROVISION FOR INCOME TAX

Current Tax is the amount of Tax payable on the taxable income for the year as determined in accordance with provision of Income Tax Act. 1961

Deferred tax resulting from "timing difference''¹ between book and taxable profit is accounted for using lax rates and laws thai have been enacted or subsequently enacted as on the balance sheet dale The Deferred rax asset is recognized and earned forward only to the extent that there is a reasonable certainty that the asset will be realized in future, however where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets supported by convincing evidence that there will be sufficient Future taxable income available to realize the assets

1

PROVISIONS, CONTINGENT UABLITIES AND CONTINGENT ASSETS

The company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of (he amount of the obligation A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may Bui probably will not, require an outflow of resources Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made Contingent assets are neither recognized nor disclosed