H Provisions, Contingent Liabilities and Contingent Assets
Provisions

A provision is recognized if, as a result of a past event, the company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required
to settle the obligation. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due
to the passage of time is recognized as a finance cost.

Contingent liabilities and contingent assets

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources. Where there is a possible obligation or a present

obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income
are recognized in the period in which the change occurs.

Onerous contracts

A provision for onerous contracts is recognized in the statement of profit and loss when the expected benefits to
be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the
contract. The provision is measured at the present value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the contract. Before a provision is established, the Group
recognizes any impairment loss on the assets associated with that contract.

Reimbursement rights

Expected reimbursements for expenditures required to settle a provision are recognized in the statement of
profit and loss only when receipt of such reimbursements is virtually certain. Such reimbursements are
recognized as a separate asset in the balance sheet, with a corresponding credit to the specific expense for
which the provision has been made.

Irevenue recognition
Sale of goods:

Revenue is recognized when the company satisfies a performance obligation by transferring a promised good
or service to its customers. The company considers the terms of the contract and its customary business
practices to determine the transaction price. Performance obligations are satisfied at the point of time when the
customer obtains controls of the asset.

Revenue is measured based on transaction price, which is the fair value of the consideration received or
receivable, stated net of discounts, returns and goods and service tax. Transaction price is recognised based
on the price specified in the contract, net of the estimated sales incentives / discounts. Accumulated experience
is used to estimate and provide for the discounts/ right of return, using the expected value method

Interest Income:

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis.

J tax expenses
Taxexpenses

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in Other comprehensive
income.

The Company has determined that interest and penalties related to income taxes, including uncertain tax
treatments, do not meet the definition of income taxes, and therefore accounted for them under Ind AS 37
Provisions, Contingent Liabilities and Contingent Assets.

Current tax

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. Current income tax relating to items recognised outside the
statement of profit and loss is recognized outside the statement of profit and loss (either in OCI or in equity in
correlation to the underlying transaction). Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions, where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities and assets are recognized for all taxable temporary differences and deductible
temporary differences.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses
can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised.

Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that
it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the
statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

Kleases

Leases

The company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The company as a lessee

The company applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The company recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.

The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets. If ownership of the leased asset transfers to the company at the end of the lease term
or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in section of Impairment
of non-financial assets.

Lease liabilities

At the commencement date of the lease, the company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the company and
payments of penalties for terminating the lease, if the lease term reflects the Variable lease payments that do
not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories)
in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the company uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily, determinable.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset. The company’s lease liabilities are included in
Borrowings.

L earnings per share

Basic earnings per share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after
tax by the weighted average number of equity shares considered for deriving basic earnings per share and also
the weighted average number of equity shares that could have been issued upon conversion of all dilutive
potential equity shares.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per
share) after considering the effect of interest and other financing costs or income (net of attributable taxes)
associated with dilutive potential equity shares by the weighted average number of equity shares considered
for deriving basic earnings per share adjusted for the weighted average number of equity shares that would
have been issued upon conversion of all dilutive potential equity shares.

M Significant accounting judgements, estimates, and assumption

The preparation of the financial statements in conformity with Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical
experiences and various other factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are revised and in any future periods affected. In particular,
the areas involving critical estimates or Judgment are :

Property, plant and equipment

The depreciation of property, plant and equipment is derived on determining of an asset’s expected useful life
and the expected residual value at the end of its life. The residual values of company’s assets are determined by
management at the time of acquisition of asset and is reviewed periodically, including at each financial year
end.

Impairment of financial and non-financial assets

Significant management judgement is required to determine the amounts of impairment loss on the financial
and non financial assets. The calculations of impairment loss are sensitive to underlying assumptions.

Tax provisions and contingencies

Significant management judgement is required to determine the amounts of tax provisions and contingencies.
Deferred tax assets are recognised for unused tax losses and MAT credit entitlements to the extent it is
probable that taxable profit will be available against which these losses and credit entitlements can be utilized.
Significant management judgement is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits together with future tax planning
strategies.

Defined benefit plans

The cost of the defined benefit plan and the present value of the obligation are determined using actuarial
valuation. An actuarial valuation involves various assumptions that may differ from actual developments in the
future. These include the determination of the discount rate, future salary increases and mortality rates. Due to
the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for
plans operated in India, the management considers the interest rates of government bonds where remaining
maturity of such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at
interval in response to demographic changes. Future salary increases and gratuity increases are based on
expected future inflation rates.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using internal valuation
techniques. The inputs to these models are taken from observable markets where possible, but where this is
not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations
of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect
the reported fair value of financial instruments.

Note 4- Right of Use Assets

Right of use assets and lease liabilities

The Company has adopted Ind AS 116, effective annual reporting period beginning April 1, 2019 and applied the
standard to its leases, under modified retrospective transition method, with right-of-use assets measured at an
amount equal to the lease liability, adjusted by the amount of the prepaid or accrued lease payments.

The Company has elected not to apply the requirements of Ind AS 116 "Leases" to short-term leases of all assets that
have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments
associated with these leases are recognized as an expense on a straight-line basis over the lease term except
inflation adjustment.

34.1 During the year the company has not proposed dividends during the year.

34.2 During the year the company has not issued securities for Specified purpose.

34.3 Borrowings taken by the Company from banks and financial institutions are fully utilised for the
specific purpose it was taken.

34.4 The Company did not have any assets other than Property, Plant and Equipment, Intangible assets.

34.5 The Title deeds of immovable property(land and building) included in Property, Plant and Equipment
held are in the name of the company.

34.6 During the company has not revalued its Property, Plant and Equipment during the year

34.7 During the year the Company has not made any Loans and Advances in the nature of Loans granted

to Promoters, Director's, KMP's and related parties except the parties which are disclosed in related
parties transactions.

34.8 No proceedings have been initiated during the year or are pending against the company at March 31,
2025 and March 31,2024 for holding any binami property under Binami transactions (Prohibition) Act,
1988 (as amended in 2016) and rules made there under

34.9 During the year the Company has not declared as wilful defaulter by any bank, financial Institution or
other lender.

34.10 There are no charges or satisfaction is yet to be registered with Registrar of Companies beyond the
statutory period.

34.11 The Company do not have any Layer of companies

34.12 During the year the company do not have any approved scheme of arrangements

34.13 During the year the Company has not taken any borrowings to directly or indirectly lend or invest in
third parties or entities or Ultimate beneficiaries

34.14 During the year the Company has not provided any security or guarantee or the like on behalf of the
Ultimate beneficiaries

34.15 During the year the Company is not covered u/s 135 of the Companies Act, 2013.

34.16 During the year the company does not have any Undisclosed Income during the Year.

34.17 During the year the company has not invested in Crypto currency or Virtual currency.

34.18 The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

34.19 The Company have not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note No. 36. Comparative figures

The Comparative figures for the previous year have been re-arranged to conform with the current year presentation of
the accounts.

As per our report of even date. For and on behalf of the board of Directors of

AMBICA AGARBATHIES AROMA & INDUSTRIES LIMITED

For Ramasamy Koteswara Rao and Co LLP

Chartered Accountants

Firm Regn No.010396S/S200084 Sd/- Sd/-

Veeravenkata Pothu Krishna Rao Perla Alapati Ramachandra Rao
Sd/_- Chairman and Managing Director Director

(Peri Reddy Talla)

^Part^ner

Membership No-236759 ^{Sd/- Sd/-}

Satyavathi Perla Ambica Hanuma

Executive Director Chief Financial Officer

Sd/-

Uma Gayathri

Place: Hyderabad Company Secretary

Date: 28-05-2025