4. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

/

'

A provision is recognized when the Company has a present obligation as a result of past
event and it is probable that an outflow of resources will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions are not discounted to its
present value and are determined based in best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates. Contingent liabilities are not recognized in the financial statements. A
contingent asset is neither recognized nor disclosed in the financial statements.

/

5. INVENTORIES

Stock of raw material, stores, finished goods, spares are valued at cost or net realizable value,
and whichever is less. Net realizable value is calculated on the basis of average price of April
i.e. to the year-end. The cost of inventories of Raw Material is computed ton average cost
basis. Finished goods stocks are valued at the cost of raw material consumed and direct cost
related to production excluding depreciation.

6. IMPAIRMENT OF ASSETS

(i) Financial assets (other than a fair value)

The Company assesses at each date of balance sheet whether a financial asset or a
group of financial assets is impaired. Ind AS 109 requires expected credit losses to be
measured through a loss allowance. The company recognizes lifetime expected losses
for all contract assets and / or all trade receivables that do not constitute a financing
transaction. For all other financial assets, expected credit losses are measured at an
amount equal to the 12 month expected credit losses or at an amount equal to the life
time expected credit losses if the credit risk on the financial asset has increased
significantly since initial recognition.

(ii) Non-Financial assets

Property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets with finite life are evaluated for
recoverability whenever there is any indication that their carrying amounts may not be
recoverable. If the recoverable amount of an asset is estimated to be less than its

'

carrying amount, the carrying amount of the asset is reduced to its recoverable
amount. An impairment loss is recognized in the statement of profit and loss.

7. OPERATING CYCLE

Based on the nature of activities of the Company and the normal time between acquisition of
assets and their realization in cash and cash equivalents, the Company has determined its
operating cycle as 12 months for the purpose of classification of its assets and liabilities as
current and non-current.

8. TAXES ON INCOME

Income tax expense comprises current tax expense and the net change in the deferred tax
asset or liability during the year. Current and deferred tax are recognized in statement of
profit and loss, except when they relate to items that are recognized in other comprehensive
income or directly in equity, in which case, the current and deferred tax are also recognized in
other comprehensive income or directly in equity, respectively.

9. FINANCIAL INSTRUMENTS

Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially measured
at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value measured on
initial recognition of financial asset or financial liability.

Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short¬
term balances (with an original maturity of three months or less from the date of acquisition),
highly liquid investments that are readily convertible into known amounts of cash and which
are subject to insignificant risk of changes in value.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost if these financial assets are held
within a business whose objective is 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.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these
financial assets are held within a business whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial
asset gives rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is measured at
amortized cost or at fair value through other comprehensive income on initial recognition.
The transaction costs directly attributable to the acquisition of financial assets and liabilities
at fair value through profit or loss are immediately recognized in profit or loss.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it

is designated as such on initial recognition. Financial liabilities at FVTPL are measured at
fair value and net gains and losses, including any interest expense, are recognised in profit or
loss. Other financial liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange gains and losses are
recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or
loss.

10. FOREIGN CURRENCY TRANSACTION

The functional currency of the Company is Indian Rupee.

Transactions in foreign currency are recorded in Rupees by applying the exchange rate
prevailing on the date of transaction. Transactions remaining unsettled are translated at the
rate of exchange ruling at the end of the year. Exchange gain or loss arising on settlement,
translation is recognized in the profit & loss a/c.

11. EMPLOYEE BENEFITS

a. Provident Fund is a defined contribution scheme and the contribution is charged to the
Profit & Loss A/c of the year when the contributions to the Government Funds is due.

b. Gratuity Liability is defined benefit obligations and are provided for on the basis of
following formula: -

Last drawn Salary * 15/26 * No. of Completed year of Services

The above calculation is done only for those employees who have completed continuous
five year of services. However, the above calculation of Gratuity is not as per Actuary
Valuation

c. Short Term Compensated absences are provided for based on estimates. Long Term
compensated absences are provided for based on actuarial valuation.

d. Actuarial gains / losses are immediate taken to the profit & loss account and are not
deferred.

12. ACCOUNTING FOR TAXES ON INCOME

(a) Current tax is determined as the tax payable in respect of taxable income for the year and is
computed in accordance with relevant tax regulations.

(b) Deferred tax assets and liabilities are recognized for future tax consequences attributable to
the timing differences that result between taxable profit and the profit as per the financial
statement. Deferred tax assets & liabilities are measured using the tax rates and the tax laws
enacted or substantially enacted as on the Balance Sheet date. Deferred tax assets are
recognized only to the extent there is reasonable certainty for its realization.

(c) The taxable income of the company being lower than the book profits under the provision of
the income tax act 1961. The company is liable to pay Minimum Alternate tax (MAT) on its
income.

(d) Considering the future profitability & taxable position in the subsequent years the company
has recognized MAT Credit as an asset by crediting the provision for income tax.

13. INTANGIBLE ASSETS

Intangible assets purchased are measured at cost as of the date of acquisition, as applicable,
less accumulated amortization and accumulated impairment, if any. Intangible assets are
amortized on a straight-line basis over their estimated useful lives from the date that they are
available for use. The estimated useful lives of the intangible assets and the amortization
period are reviewed at the end of each financial year and the amortization period is revised to
reflect the changed pattern, if any.

/

14. EARNINGS PER SHARE

!/

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the
post tax effect of extraordinary items, if any) by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted
for dividend, interest and other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares which could have been
issued on the conversion of all dilutive potential equity shares. Potential equity shares are
deemed to be dilutive only if their conversion to equity shares would decrease the net profit
per share from continuing ordinary operations. Potential dilutive equity shares are deemed to
be converted as at the beginning of the period, unless they have been issued at a later date.

The dilutive potential equity shares are adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market value of the outstanding shares).
Dilutive potential equity shares are determined independently for each period presented. The
number of equity shares and potentially dilutive equity shares are adjusted for share splits /
reverse share splits and bonus shares, as appropriate.

15. SEGMENT REPORTING

/

The Company identifies primary segments based on the dominant source, nature of risks and
returns and the internal organization and management reporting structure. The operating
segments are the segments for which separate financial information is available and for which
operating profit/loss amounts are evaluated regularly by the executive Management in
deciding how to allocate resources and in assessing performance. The accounting policies
adopted for segment reporting are in line with the accounting policies of the Company.
Segment revenue, segment expenses, segment assets and segment liabilities have been
identified to segments on the basis of their relationship to the operating activities of the
segment. Inter-segment revenue is accounted on the basis of transactions which are primarily
determined based on market/fair value factors. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are not allocable to segments on reasonable basis
have been included under "unallocated revenue / expenses / assets / liabilities”.

'

FOR, AGRAWAL SHUKLA & CO. BY ORDER OF THE BOARD

CHARTERED ACCOUNTANTS FOR, ASHOKA REFINERIES LIMITED

FIRM REG. NO. 326151E

'

'

Sd/- Sd/- Sd/-

(CA PANKAJ JAIN) HIFZUL RAHIM TULSI RAM SAHU

PARTNER MANAGING DIRECTOR DIRECTOR & CFO

M NO. 407917 DIN: 08491854 DIN: 01395347

'

Place: Raipur
Date: 22.05.2024