Accounting Policies of Devson Catalyst Ltd. Company

I. MATERIAL ACCOUNTING POLICIESA) BASIS OF PREPARATION OF FINANCIAL STATE¬
MENT

These financial statements are prepared in accor¬
dance with Indian Generally Accepted Accounting
Principles (GAAP) under the historical cost conven¬
tion on the accrual basis. GAAP comprises man¬
datory accounting standards as prescribed under
Section 133 of the Companies Act, 2013 (''the Act'')
read with Rule 7 of the Companies (Accounts) Rules,
2014, the provisions of the Act. The accounting pol¬
icies adopted in the preparation of financial state¬
ments have been consistently applied. All assets

and liabilities have been classified as current or
non-current as per the company''s normal operat¬
ing cycle and other criteria set out in the Schedule
III to the Companies Act, 2013. Based on the nature
of operations and time difference between the pro¬
vision of services and realization of cash and cash
equivalents, the company has ascertained its oper¬
ating cycle as 12 months for the purpose of current
and non-current classification of assets and liabili¬
ties.

B) USE OF ESTIMATES

The preparation of financial statements in conformi¬
ty with Accounting Standards requires the manage¬
ment to make judgments, estimates and assump¬
tions that affect the reported amounts, at the end
of the reporting period. Although these estimates
are based on the management''s best knowledge
of current events and actions, uncertainty about
these assumptions and estimates could result in
the outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in fu¬
ture periods. Difference between the actual result
and estimates are recognized in the period in which
they are known/ materialized.

All assets and liabilities are classified into current
and non-current.

Assets

An asset is classified as current when it satisfies any of
the following criteria: a) it is expected to be realised in,
or is intended for sale or consumption in, the Compa¬
ny''s normal operating cycle; b) it is held primarily for the
purpose of being traded; c) it is expected to be realised
within 12 months after the reporting date; or d) it is cash
or cash equivalent unless it is restricted from being ex¬
changed or used to settle a liability for at least 12 months
after the reporting date.

Current assets include the current portion of non-cur¬
rent financial assets. All other assets are classified as
non-current.

Liabilities

A liability is classified as current when it satisfies any of
the following criteria: a) it is expected to be settled in the
Company''s normal operating cycle; b) it is held primarily
for the purpose of being traded; c) it is due to be set¬
tled within 12 months after the reporting date; or d) the
Company does not have an unconditional right to defer

settlement of the liability for at least 12 months after the
reporting date. Terms of a liability that could, at the op¬
tion of the counterparty, result in its settlement by the is¬
sue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current
financial liabilities. All other liabilities are classified as
non-current.

C) ACCOUNTING CONVENTION

The group follows the mercantile system of account¬
ing, recognizing income and expenditure on accrual
basis. The accounts are prepared on historical cost
basis and as a going concern. Accounting policies
not referred to specifically otherwise, are consistent
with the generally accepted accounting principles.

The following material accounting policies are ad¬
opted in the preparation and presentation of these
financial statements:

1. REVENUE RECOGNITION

Revenue is recognized only when all the significant
risks and rewards incident to ownership to the cus¬
tomer, it can be reliably measured, and it is reason¬
able to expect ultimate collection. Revenue from
operation includes Sales of Goods net of Goods and
Services Tax, adjusted for discounts (net) and gain
/ Loss on corresponding hedged contracts. Export
sales has been recognised at the time of removal
of goods from factory at invoice value (whether FOB
or CIF) on the basis of exchange rates declared by
Custom Department in the shipping bills. Sales are
disclosed net of GST, trade discounts and returns,
as applicable.

Revenue/ Loss from bargain settlement of goods
is recognized at the time of settlement of transac¬
tions.

Interest Income is recognized on a time proportion
basis taking into account the amount outstanding
and the interest rate applicable.

Duty Drawback and Export incentives are recorded
in books of accounts when there is reasonable cer¬
tainty to receive the same as income and booked on
accrual basis.

All other income and Expenditure are recognized
and accounted for on accrual basis.

2. PROPERTY, PLANT & EQUIPMENT''S (TANGIBLE
FIXED ASSETS AND DEPRECIATION)

Tangible Assets are stated at cost net of recover¬
able taxes, trade discounts and rebates and include
amounts added on revaluation, less accumulated
depreciation and impairment loss, if any. The cost

them to respective present location and condition.

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. Cost is determined on First in first
out basis of inventory valuation method.

6. INVESTMENTS:

a) Current Investments: Current Investments are
carried at Cost or NRV whichever is less, de¬
termined by category of investment.

b) Non-Current Investments: Long-term invest¬
ments are stated at cost less provision for
diminution other than temporary, if any, in val¬
ue of such investments.

7. RETIREMENT BENEFITS & OTHER EMPLOYEE
BENEFITSa) Defined-contribution plans:

All short term employee benefits are accounted on
undiscounted basis during the accounting period
based on services rendered by employees.

The Company''s contribution to Provident Fund is
determined based on a fixed percentage of the eligi¬
ble employees'' salary and charged to the Statement
of Profit and Loss on accrual basis.

b) Defined Benefit Plans:

The Company has a defined benefit gratuity plan.
Employee who has completed five years or more of
service gets a gratuity on departure at 15 days'' sal¬
ary (last drawn salary) for each completed year of
service. The scheme of gratuity is unfunded.

The Company has made provision for payment of
Gratuity to its employees. This Provision is made
as per the method prescribed under the Payment
of Gratuity Act. The cost of providing gratuity under
this plan is determined on the basis of actuarial val¬
uation at period/year end.

8. FOREIGN EXCHANGE TRANSACTIONSa) Initial Recognition: -

Foreign currency transaction is recorded at Ex¬
change rate prevailing on the date of transaction.

b) Conversion

The foreign currency monetary items consisting of
amount received in advance, trade receivable, pay¬
able and balance in bank a/c at the end of the year
have been restated at the rate prevailing at the bal¬
ance sheet date.

c) Exchange Difference:

Exchange differences arising on the settlement of
monetary items, or on reporting such monetary
items of Company at rates different from those at
which they were initially recorded during the year, or
reported in previous financial statements, are rec¬
ognized as income or as expenses in the statement
of profit and loss in the year in which they arise.

9. CASH FLOW STATEMENT

Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the effects
of transactions of a non- cash nature, any deferrals
or accruals of past or future operating cash receipts
or payments and item of income or expenses asso¬
ciated with investing or financing cash flows. The
cash flows from operating, investing and financing
activities are segregated.

10. BORROWING COSTS

Borrowing costs that are directly attributable to the
acquisition or construction of a qualifying asset are
capitalized as part of the cost of that asset till such
time the asset is ready for its intended use. A quali¬
fying asset is an asset that necessarily takes a sub¬
stantial period of time to get ready for its intended
use. Costs incurred in raising funds are amortized
equally over the period for which the funds are ac¬
quired. All other borrowing costs are charged to
profit and loss account.

11. INCOME TAX

The accounting treatment for the Income Tax in re¬
spect of the Company''s income is based on the Ac¬
counting Standard on ''Accounting for Taxes on In¬
come'' (AS-22). The provision made for Income Tax
in Accounts comprises both, the current tax and
deferred tax. Provision for Current Tax is made on
the assessable Income Tax rate applicable to the
relevant assessment year after considering various
deductions available under the Income Tax Act, 1961

Deferred tax is recognized for all timing differences;
being the differences between the taxable income
and accounting income that originate in one period
and are capable of reversal in one or more subse¬
quent periods. Such deferred tax is quantified us¬
ing the tax rates and laws enacted or substantively
enacted as on the Balance Sheet date. The carrying
amount of deferred tax asset/liability is reviewed at
each Balance Sheet date and consequential adjust¬
ments are carried out.

12. EARNINGS PER SHARE

Basic earnings per share is computed by dividing the
net profit after tax by the weighted average number
of equity shares outstanding during the period. Di¬
luted earnings per share is computed by dividing the
profit after tax by the weighted average number of
equity shares considered for deriving basic earnings
per share and also the weighted average number of
equity shares that could have been issued upon con¬
version of all dilutive potential equity shares.

The diluted potential equity shares are adjusted for
the proceeds receivable had the shares been actu¬
ally issued at fair value which is the average market
value of the outstanding shares. Dilutive potential
equity shares are deemed converted as of the be¬
ginning of the period, unless issued at a later date.
Dilutive potential equity shares are determined in¬
dependently for each period presented.