2.9 Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and reliable estimate can be made of the amount of the obligation. Disclosure for Contingent Liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. No provision is recognized or disclosure for Contingent Liability is made when there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

2.10 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the period/year in which an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

2.11 Foreign Currency Transactions

(i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(ii) Monetary items denominated in foreign currencies at the period/year-end are restated at period/year-end rates.

(iii) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

(iv) Premium or discount on forward contracts for hedging foreign currency transactions are amortized and recognized in the statement of profit and loss over the period of the contract.

2.12 Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as long- term investments. Current Investments are carried at lower of cost and quoted/fair value determined on category/item wise. Long Term Investments are stated at cost. However, Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary.

2.13 Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

2.14 Government Grants

Grants and subsidy from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is netted off from the respective expenses necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grants or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

2.15 Leases

The company's significant leasing arrangements are in respect of operating leases for factory. The leasing arrangements are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable is charged as rent in Statement of Profit & Loss.

(ii) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

i) Loans repayable on demand from banks:

(a) Cash credit facility is secured against trade receivables of the Company. Further, it has been personally guaranteed by Directors and Promoter of the company and Third parties. It carries interest @ 9% p.a. as on 26/06/2020, 8.5% p.a. as on 10/07/2020 and 9.85% p.a. as on 28/02/2022.

(b) Working capital facility is primarily secured against inventories, trade (export) receivables and collateral security of plant and equipments and factory shed of the Company. Further, it has been personally guaranteed by Directors and Promoter of the company. It is repayable on demand and carries interest @ 9% p.a. as on 26/06/2020, 8.5% p.a. as on 10/07/2020 and 9.85% p.a. as on 28/02/2022.

ii) Loans and advances from Directors and Related Parties :

Unsecured loans from directors and related parties are taken and maintained during the year pursuant to the stipulation mentioned by the banks for loans facilities availed from them and are repayable on demand and carries interest @ 9% p.a (P.Y. 9% p.a.)

(b) Debt ratio: It is increased due to Inflow of funds through Deb facility..

(d) Return on Equity ratio : Correspondence increase in Shareholder Equity as well decline in profit.

(g) Trade Payables T/o ratio: it is increased due to increase in purchase.

(i) Net Profit ratio: Decline in profit for the current period.

(k) Return on Investment : increase in investment due to which there is substantial decline.

38 Other Statutory Disclosures as per the Companies Act, 2013

The Company does not have anything to report in respect of the following:

• Benami properties

• Trading or investment in crypto or virtual currency

• Giving/receiving of any loan or advance or funds with the understanding that the recipient shall lend, invest, provide security or guarantee on behalf of the Company/funding party

• Transactions not recorded in books that were surrendered or disclosed as income during income-tax assessment

• Charges or satisfaction not registered with ROC beyond statutory period

• Title deeds in respect of freehold immovable properties not being held in the name of the Company.

• Transactions with struck-off companies

• Non-compliance with number of layers as prescribed under the Companies Act, 2013, read with Companies (Restriction on number of Layers) Rules, 2017.

• Wilful Defaulter by any bank or financial institution or other lender.

39 Regrouping

Previous year’s figures have been re-grouped, re-classified and re-arranged whenever necessary.

The Company has received intimationfrom “Suppliers” regarding their status under Micro, Smalland Medium Enterprise Development Act,2006, and hence, disclosures, ifany, relating toamount unpaid as atthe period end as required under the act has been given. The interest has not been provided as per the explanation provided by the management after confirmation letters from the parties that the payment is made within due dates.

Disclosure requirement as required by the AS-15 (Revised 2005), Employee Benefits are not given in view of non-availability of the required information with the company.

For DJNV & Co. For and on behalf of the Board

Chartered Accountants Ushanti Colour Chem Limited

Firm's Registration No. 115145W

CA Shruti C Shah Maunal Gandhi Maunal Gandhi Minku Gandhi Pradip Parikh Vishakha A. Tanwar

Partner ^Director Director ^Director CFO CS

Membership No. 175839 00118559 00118559 00118617 AIZPP5478J M. No: 40517

UDIN: 24175839BKEFQP8625

Place: Ahmedabad Place: Ahmedabad

Date: 29, May 2024 Date: 29 May 2024