Note A - Corporate Information

Paragon Fine and Speciality Chemical Limited (CIN:- U24304GJ2018PTC105071) (“the company”) is a Public Limited Company, domiciled in India and incorporated under the provisions of the Companies Act, 2013. The company is engaged in business of Manufacturing of Chemicals.

Note B - Basis of Preparation of Financial Statements

The financial statements of the company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention, except otherwise specified.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained.

B. 1 Summary of significant accounting policies

a) Presentation and disclosure of financial statements:

The financial statement has been prepared under the provisions of the Companies Act 2013. The adoption of Schedule-III of the Companies Act 2013 and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

b) Use of estimates:

The preparation of financial statements in conformity with Accounting Standards requires the management to make judgments, estimates and assumptions 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 future periods. Difference between the actual result and estimates are recognized in the period in which the are known / materialized.

c) Property, Plant & Equipments (Tangible Fixed Assets and Depreciation):

- Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

- Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

- Assets which are not ready for their intended use are disclosed under Capital Work-in-Progress and all the cost relating to such assets are shown under work-in-progress.

- Identification of the components of Property, Plant & Equipments as required under revised AS 10 is under process.

Depreciation:

- Depreciation on tangible fixed assets is provided on the straight - Line Method over the useful lives of assets as prescribed in the schedule II of the Companies Act, 2013. Depreciation for assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

- Depreciation and Amortization methods, useful lives and residual values are reviewed periodically, at each financial year end.

- Pursuant to the enactment of Companies Act 2013, the Company has applied the estimated useful lives as specified in Schedule II.

d) Impairment of tangible and intangible assets:

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

e) Investments:

Current Investments are carried at lower of cost or fair value. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

f) Inventories :-

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any, except in case of by-products which are valued at net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

g) Revenue recognition:

- Revenue is recognized only when all the significant risks and rewards incident to ownership to the customer, it can be reliably measured and it is reasonable 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.

- Revenue / Loss from bargain settlement of goods is recognized at the time of settlement of transections.

- Dividend income is recognized when the right to receive payment is established.

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

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

h) Borrowing Costs:-

Borrowing costs that are attributable to the acquisition, construction or production of a qualification assets are capitalized as a part of the cost of such assets. All others borrowing cost are charged to revenue.

i) Income taxes:

- Tax expense comprises of current and deferred taxes. Current Income Tax is measured at the amount expected to be paid to the tax authorities using the applicable tax rates.

- Deferred income taxes reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

- Provision for Current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Tax expense comprises of current and deferred taxes.

j) Contingent Liabilities & Contingent Assets:

- A provision is recognized when the company has a present obligation as a result of past event(s), 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. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

- Contingent liabilities are disclosed in the financial statement unless the possibility of outflow is remote.

- Contingent Liabilities are not provided for and are disclosed by way of notes.

- Contingent Assets are neither recognized nor disclosed in the financial statements.