Accounting Policies of Veronica Production Ltd. Company

Mar 31, 2024

Note 1: Material Accounting Policies

i) These financial statements have been prepared in accordance with the Indian Accounting
Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs
pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian
Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act. The
accounting policies are applied consistently to all the periods presented in the financial
statements.

The financial statements have been prepared under the historical cost convention with the
exception of certain financial assets and liabilities which have been measured at fair value, on
an accrual basis of accounting.

All the assets and liabilities have been classified as current and non-current as per normal
operating cycle of the Company and other criteria set out in as per the guidance set out in
Schedule III to the Act. Based on nature of services, the Company ascertained its operating
cycle as 12 months for the purpose of current and non-current classification of asset and
liabilities.

The Company’s financial statements are reported in Indian Rupees, which is also the
Company’s functional currency, and all values are rounded to the nearest lakhs (INR 00,000),
except when otherwise indicated.

ii) Accounting Estimates

The preparation of the financial statements, in conformity with the Ind AS, requires the
management to make estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities and disclosure of contingent
liabilities as at the date of financial statements and the results of operation during the reported
period. Although these estimates are based upon management’s best knowledge of current
events and actions, actual results could differ from these estimates which are recognised in
the period in which they are determined.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty
at the reporting date, that have a material accounting policy of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year. The Company
based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the financial statements in the period
in which changes are made and, if material, their effects are disclosed in the notes to the
financial statements.

Deferred tax assets

In assessing the realisability of deferred income tax assets, management considers whether
some portion or all of the deferred income tax assets will not be realized. The ultimate
realization of deferred income tax assets is dependent upon the generation of future taxable
income during the periods in which the temporary differences become deductible.
Management considers the scheduled reversals of deferred income tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment. Based on the
level of historical taxable income and projections for future taxable income over the periods in
which the deferred income tax assets are deductible, management believes that the Company
will realize the benefits of those deductible differences. The amount of the deferred income
tax assets considered realizable, however, could be reduced in the near term if estimates of
future taxable income during the carry forward period are reduced.

iii) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

a) Financial Assets

Initial Recognition

In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial
assets are recognised initially at fair value plus transaction costs that are directly attributable
to the acquisition of the financial asset. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in the market
place (regular way trades) are recognised on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in following
categories:

Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if these financial assets are
held within a business model with an objective to hold these assets in order to collect
contractual cash flows and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Interest income from these financial assets is included in finance income using
the effective interest rate (“EIR”) method. Impairment gains or losses arising on these assets
are recognised in the Statement of Profit and Loss.

Financial Assets Measured at Fair Value

Financial assets are measured at fair value through Other comprehensive income( ‘OCI’ )if
these financial assets are held within a business model with an objective to hold these assets
in order to collect contractual cash flows or to sell these financial assets and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding. Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains or losses,
interest revenue and foreign exchange gains and losses which are recognised in the
Statement of Profit and Loss. Financial asset not measured at amortised cost or at fair value
through OCI is carried at FVPL.”

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies the expected credit loss (“”ECL””) model
for measurement and recognition of impairment loss on financial assets and credit risk
exposures.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on
trade receivables. Simplified approach does not require the Company to track changes in
credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each
reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the group in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses
resulting from all possible default events over the expected life of a financial instrument. The
12-month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as
income/ expense in the Statement of Profit and Loss.”

De-recognition of Financial Assets

The Company de-recognises a financial asset only when the contractual rights to the cash
flows from the asset expire, or it transfers the financial asset and substantially all risks and
rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Company recognizes its retained
interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Company continues to recognise the financial asset and also recognises
a collateralised borrowing for the proceeds received.

b) Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to
the substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities. Equity instruments which are issued for cash are
recorded at the proceeds received. Equity instruments which are issued for consideration
other than cash are recorded at fair value of the equity instrument.

Financial Liabilities

1) Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and
borrowings and payables as appropriate. All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and payables.

2) Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below
Financial liabilities at FVPL

Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at FVPL. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses
on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Any difference between the proceeds (net of transaction
costs) and the settlement or redemption of borrowings is recognised over the term of the
borrowings in the Statement of Profit and Loss.

Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included as
finance costs in the Statement of Profit and Loss.”

3) De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is
discharged, cancelled or expired. When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as de-recognition of the
original liability and recognition of a new liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit and Loss.

c) Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance
Sheet if there is a currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis to realise the assets and settle the liabilities
simultaneously.

iv) Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand ,
which are subject to an insignificant risk of changes in value.

v) Revenue Recognition

a) 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 measured.

b) Sales are excluding GST and are stated net of discounts, returns and rebates.

vi) Income Tax

Income tax comprises of current and deferred income tax. Income tax is recognised as an
expense or income in the Statement of Profit and Loss, except to the extent it relates to items
directly recognised in equity or in OCI.

a. Current Income Tax

Current income tax is recognised based on the estimated tax liability computed after taking
credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current
income tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.

b. Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and
liabilities are recognised for all deductible temporary differences between the financial
statements’ carrying amount of existing assets and liabilities and their respective tax base.
Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that
are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and
liabilities of a change in tax rates is recognised in the period that includes the enactment date.
Deferred tax assets are only recognised to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be utilised. Such assets
are reviewed at each Balance Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.

Minimum Alternative Tax (“MAT”) credit is recognised as an asset only when and to the extent
it is probable that the Company will pay normal income tax during the specified period.

vii) Trade Receivables

A receivable is classified as a ‘trade receivable’ if it is in respect of the amount due on account
of goods sold or services rendered in the normal course of business. Trade receivables are
recognised initially at fair value and subsequently measured at amortised cost using the EIR
method, less provision for impairment.

viii) Trade Payables

A payable is classified as a ‘trade payable’ if it is in respect of the amount due on account of
goods purchased or services received in the normal course of business. These amounts
represent liabilities for goods and services provided to the Company prior to the end of the
financial year which are unpaid. These amounts are unsecured and are usually settled as per
the payment terms stated in the contract. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are
recognised initially at their fair value and subsequently measured at amortised cost using the
EIR method.

ix) Earnings Per Share

Basic earnings per share is computed by dividing the net profit or loss for the period
attributable to the equity shareholders of the Company by the weighted average number of
equity shares outstanding during 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.

Diluted earnings per share is computed by dividing the net profit or loss for the period
attributable to the equity shareholders of the Company and weighted average number of equity
shares considered for deriving basic earnings per equity share and also the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable
had the equity shares been actually issued at fair value (i.e. the average market value of the
outstanding equity shares).

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Mar 31, 2015

1) BASIS OF ACCOUNTING:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles on the basis of going concern, recognizing significant items of income and expenditure on accrual basis and materially comply with the applicable accounting standards adopted consistently by the assessee, unless otherwise stated.

2) FIXED ASSETS:

i) Fixed assets are shown at cost of acquisition less depreciation till date.

ii) All costs relating to the acquisition and installation of fixed assets are capitalized.

iii) Physical existence of fixed assets is verified by assessee.

3) INVENTORIES:

Inventories are valued at lower of cost or market value.

4) REVENUE RECOGNITION:

i) Revenue is recognised on accrual basis taking materiality concept.

ii) Expenditures are accounted for on accrual basis taking materiality concept.

5) Audit is conducted keeping in view the provisions of Income Tax Act, 1961 and compliance with provisions of the other acts, laws or statutes is not verified or checked.

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Mar 31, 2013

I) Basis of Accounting :

Financial Statement are prepared under historical cost convention on a accrual basis in accordance with the requirements of the Companies Act. 1956.

ii) Fixed Assets and Depreciation

a) The Fixed assets are stand at cost of acquisition inclusive of freight, duties, taxes, and inclusive of expenses,

b) Depreciation :

(i) Depreciation on fixed assets is not provided on the value as decided by Board of Directors.

ii) INVENTORIES

The Inventories are stated at Cost or NRV whichever is less.

iii) MISCELLANEOUS EXPENSES . There is no Preliminary Expenditure at the year end.

iv) CONTINGENT LIABILITIES

No provision is made for liabilities, which are contingent in nature but, if material the same is disclosed by way of notes to the accounts.

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Mar 31, 2012

I) Basis of Accounting :

Financial Statement are prepared under historical cost convention on a accrual basis in accordance with the requirements of the Companies Act. 1956.

ii) Fixed Assets and Depreciation

a) The Fixed assets are stand at cost of acquisition inclusive of freight duties, taxes, and inclusive of expenses.

b) Depreciation :

(i) Depreciation on fixed assets is provided on "Written Down Value Method" at the rate and in the manner prescribed in Schedule XIV of the Companies Act,1956.

ii) INVENTORIES

There is no Inventory hence not applicable.

iii) MISCELLANEOUS EXPENSES

There is no Preliminary Expenditure at the year end.

iv) CONTINGENT LIABILITIES

No provision is made for liabilities, which are contingent in nature but, if material the same is disclosed by way of notes to the accounts.

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Mar 31, 2011

I) Basis of Accounting :

Financial Statement are prepared under historical cost convention on a accrual basis in accordance with the requirements of the Companies Act. 1956.

ii) Fixed Assets and Depreciation

a) The Fixed assets are stand at cost of acquisition inclusive of freight, duties, taxes, and inclusive of expenses. b) Depreciation :

(i) Depreciation on fixed assets is provided on "Written

Down Value Method" at the rate and in the manner prescribed in Schedule XIV of the Companies Act,1956.

ii) INVENTORIES

There is no Inventory hence not applicable.

iii) MISCELLANEOUS EXPENSES

There is no Preliminary Expenditure at the year end.

iv) CONTINGENT LIABILITIES

No provision is made for liabilities, which are contingent in nature but, if material the same is disclosed by way of notes to the accounts.

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Mar 31, 2010

I. ACCOUNTING CONVENTION :

The financial statement is prepared under the historical cost convention and follows the mercantile system Of accounting and recognizes income and expenditure on the accrual basis except those with significant uncertainties. Sales & Purchase is accounted exclusive of excise duty.

II. FIXED ASSETS :

There is no Fixed assets hence not applicable.

III. DEPRECIATION :

Depreciation on fixed assets is provided on "Written Down Value Method" at the rate and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

IV. INVENTORIES :

The is no any Inventory at the year ended 31-03-2009.

V. INVESTMENT:

All the Investment are Long Term and stated at Cost.

VI. MISCELLANOUS EXPENSES :

Preliminary Expenditures are written off over period of Five years.

VII. CONTINGENT LIABILITIES :

No Provision is made for liabilities, which are contingent in nature but, if material, the same all disclosed by way notes to the accounts.