2.16 Provisions

Provision is recognized when the Company has a present obligation (legal or constructive) as a result of
past event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the
time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to
the passage of time is recognised as a finance cost.

2.17 Financial instruments - Financial assets, Financial liabilities and Equity instruments

2.17.1 Financial Assets Recognition: Financial assets include Investments, Trade Receivables,
Advances, Security Deposits, Cash and Cash equivalents. Such assets are initially recognised at
transaction price when the Company becomes party to contractual obligations. The transaction
price includes transaction costs unless the asset is being fair valued through the Statement of
Profit and Loss.

2.17.2 Classification: Management determines the classification of an asset at initial recognition
depending on the purpose for which the assets were acquired. The subsequent measurement
of financial assets depends on such classification.

2.17.3 Financial assets classification and measurement

(a) amortised cost, where the financial assets are held solely for collection of cash flows
arising from payments of principal and/ or interest.

(b) fair value through other comprehensive income (FVTOCI), where the financial assets
are held not only for collection of cash flows arising from payments of principal and
interest but also from the sale of such assets. Such assets are subsequently measured
at fair value, with unrealised gains and losses arising from changes in the fair value being
recognised in other comprehensive income.

(c) fair value through profit or loss (FVTPL), where the assets are managed in accordance
with an approved investment strategy that triggers purchase and sale decisions based
on the fair value of such assets. Such assets are subsequently measured at fair value,
with unrealised gains and losses arising from changes in the fair value being recognised
in the Statement of Profit and Loss in the period in which they arise. Trade Receivables,
Advances, Security Deposits, Cash and Cash equivalents etc. are classified for
measurement at amortised cost while investments may fall under any of the aforesaid
classes. However, in respect of particular investments in equity instruments that would
otherwise be measured at fair value through profit or loss, an irrevocable election at initial
recognition may be made to present subsequent changes in fair value through other
comprehensive income. This option has been adopted by the company irrevocably.

2.17.4 Financial Assets at fair value through other comprehensive income: These include
financial assets that are equity instruments and are irrevocably designated as such upon initial
recognition. Subsequently, these are measured at fair value and changes therein are recognized
directly in other comprehensive income, net of applicable income taxes.

Dividends from these equity investments are recognized in the Statement of Profit and Loss
when the right to receive payment has been established. When the equity investment is
derecognized, the cumulative gain or loss in equity is transferred to Other equity.

2.17.5 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 amortised cost or at fair value through other
comprehensive income on initial recognition. The transaction costs that are directly attributable
to the acquisition of financial assets, which are measured at fair value through profit or loss, are
immediately recognised in profit or loss.

2.17.6 Cash and cash equivalents: Cash and cash equivalents comprise cash at banks and on hand
and short-term deposits with an original maturity of three months or less, from the date of
purchase which are subject to an insignificant risk of changes in value.

2.17.7 Equity instruments: An equity instrument is any contract that evidences residual interests in
the assets of the Company after deducting all of its liabilities. Equity instruments issued by the
Company are recorded at the proceeds received, net of direct issue costs.

2.17.8 Financial Liabilities: Borrowings, trade payables and other financial liabilities are initially
recognised at the value of the respective contractual obligations. They are subsequently
measured at amortised cost. Any discount or premium on redemption/settlement is recognised
in the Statement of Profit and Loss as finance cost over the life of the liability using the effective
interest method and adjusted to the liability figure disclosed in the Balance Sheet.

Financial liabilities are derecognised when the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled or on expiry.

2.17.9 Financial guarantee contracts: These are initially measured at fair value and are subsequently
measured at the higher of the amount of loss allowance determined or the amount initially
recognized, less the cumulative amount of income recognized.

2.17.10 Other financial liabilities: These are measured at amortized cost using the effective interest
rate method.

2.17.11 Determination of fair value: The fair value of a financial instrument on initial recognition is
normally the transaction price (fair value of the consideration given or received). Subsequent
to initial recognition, the Company determines the fair value of financial instruments, that are
quoted in active markets, using the quoted prices (financial assets held) and using valuation
techniques for other instruments. Valuation techniques include discounted cash flow method
and other valuation models.

2.17.12 Derecognition of financial assets and financial liabilities:

The Company derecognizes a financial asset only when the contractual rights to the cash
flows from the asset expires or it transfers the financial asset and substantially all the 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 asset 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 recognize the
financial asset and also recognizes a collateralized borrowing for the proceeds received.

Financial liabilities are derecognised when these are extingushed, which is when the obligation
is discharged, cancelled or expired.

2.17.13 Impairment of financial assets:

The Company assesses at each reporting date whether a financial asset (or a group of financial
assets) such as investments, trade receivables, advances and security deposits held at amortised
cost and financial assets that are measured at fair value through other comprehensive income
are tested for impairment based on evidence or information that is available without undue
cost or effort. Expected credit losses are assessed and loss allowances recognised if the credit
quality of the financial asset has deteriorated significantly since initial recognition.

2.17.14 Derivative financial instruments

The Company does not hold any derivative and embedded derivative financial instruments.

2.18 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset or
a liability, the Company takes into account the characteristics of the asset or liability, if market participants
would take those characteristics into account, when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3
based on the degree to which the inputs to the fair value measurements are observable and the significance
of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value

measurement is directly or indirectly observable.

- Level 3: Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable.

2.19 Segment reporting

The Operating Segment have been reported in a manner consistent with the internal reporting provided
to the Chief Financial Officer and the Chief Executive Officer who are the Chief Operating Decision Maker
(CODM).The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and
Extrusion Gum and Rubber Cement, which are used for retreading of tyres and providing tyre retreading
service. These products do not have any different risk and returns and thus the CODM performs review
based on one operating segment.

The company prepares its segment information in conformity with the accounting policies adopted for
preparing and presenting the financial statements of the company as a whole.

2.20 Earnings per share

Basic earnings per share are computed by dividing profit/loss for the period by the weighted average
number of shares outstanding during the year. Partly paid up shares are included as fully paid equivalents
according to the fraction paid up. Diluted earnings per share are computed using the weighted average
number of shares and dilutive potential shares, except where the result would be anti-dilutive.

2.21 Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the
Company will comply with the conditions attached to them, and (ii) the grant/ subsidy will be received.

Where the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the
statement of profit and loss over the periods necessary to match them with the related costs, which they
are intended to compensate. Where the grant relates to an asset, it is reduced from the respective cost of
an asset and accordingly depreciation is calculated on reduced amount

2.22 Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the
company or a present obligation that is not recognized because it is not probable that an outflow of
resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognized because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses its existence in the financial statements.

2.23 Recent Pronouncements

There are no pronouncements after 31st March 2025 by Ministry of Corporate Affairs.