Accounting Policies of Annapurna Swadisht Ltd. Company

Mar 31, 2025

2 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

(a) Basis of preparation of Financials Statements

The Financial Statements of the Company have
been prepared in accordance with the generally
accepted accounting principles in India (Indian
GAAP). The Company has prepared these financial
statements to comply in all material aspects with
the accounting standards notified under Section
133 of the Companies Act, 2013 read together
with paragraph 7 of the Companies (Accounts)
Rules 2014. The financial statements have been
prepared under the historical cost convention on
an accrual basis.

The accounting policies adopted in the
preparation of financial statements are
consistent with those of previous year."

(b) Use of Estimates

The preparation of financial statements
in conformity with Indian GAAP requires
management to make estimates and
assumptions that affect the application of
accounting policies and reported amounts of
assets, liabilities, revenues and expenses and
disclosure of contingent assets and liabilities
at the date of the financial statements. The

estimates and assumptions used in the
accompanying financial statements are based
upon management''s evaluation of the relevant
facts and circumstances as of the date of financial
statements which in management''s opinion
are prudent and reasonable. Actual results may
differ from the estimates used in preparing the
accompanying financial statements. However,
accounting estimates could change from period
to period. Appropriate changes in estimates
are made as the Management becomes aware
of changes in circumstances surrounding the
estimates. Any revision to accounting estimates
is recognised prospectively in current and
future periods and, if material, their effects are
disclosed in the notes to the Standalone financial
statements.

(c) Functional and Presentation Currency

These financial statements are presented in
Indian Rupees (Rs.), the company''s functional
currency. All Financial information presented in
Indian Rupee has been rounded off to the nearest
Lakh as per the requirements of Schedule III of
"the Act" unless otherwise stated.

(d) Current-Non-Current Classification

All assets and liabilities are classified into current
and non-current

Assets

An asset is classified as current when it satisfies
any of the following criteria:

i) It is expected to be realized in, or is intended
for sale or consumption in, the Company''s
normal operating cycle;

ii) It is held primarily for the purpose of
being traded;

iii) It is expected to be realized within 12
months after the reporting date; or

iv) It is cash or cash equivalent unless it is
restricted from being exchanged or used to
settle a liability for at least 12 months after
the reporting date.

Current assets include the current portion of
non-current financial assets. All other assets are
classified as non-current.

Liabilities

A liability is classified as current when it satisfies
any of the following criteria:

i) It is expected to be settled in the Company''s
normal operating cycle;

ii) It is held primarily for the purpose of
being traded;

iii) It is due to be settled within 12 months
after the reporting date;

iv) The Company does not have an
unconditional right to defer settlement of
the liability for at least 12 months after the
reporting date.

Current liabilities include the current portion
of non-current financial liabilities. All other
liabilities are classified as non-current"

(e) Operating Cycle

Operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. Based
on the above definition and nature of business,
the company has ascertained its operating
cycle as less than 12 months for the purpose of
current / non current classification of assets and
liabilities.

(f) Property, Plant and Equipment Intangible
Assets & CWIP

(i) Property, Plant and Equipment

"Property, Plant and Equipment are stated
at cost less accumulated depreciation. The
total cost of assets comprises its purchase
price, freight, duties, taxes and any other
incidental expenses directly attributable to
bringing the asset to the working condition
for its intended use and interest on loans
attributable to the acquisition of assets up
to the date of commissioning of assets.

Subsequent costs related to an item
of property, plant and equipment
are recognized as a separate asset, as
appropriate, only when it is probable that
future economic benefits associated with
the item will flow to the Group and the
cost of the item can be measured reliably.
The carrying amount of any component

accounted for as a separate asset is
derecognized when replaced. All other
repairs and maintenance are recognized
in statement of profit and loss during the
reporting period when they are incurred.

An item of property, plant and equipment
is derecognized on disposal or when no
future economic benefits are expected
from its use or disposal. The gains or losses
arising from de-recognition are measured
as the difference between the net disposal
proceeds and the carrying amount of the
asset and are recognized in the statement
of profit and loss when the asset is
derecognized"

(ii) Intangible Assets

"Intangible assets are recognized if it is
probable that the future economic benefits
that are attributable to the assets will flow
to the Company and cost of the assets can
be measured reliably. The cost of intangible
assets comprises its purchase price,
including any duties and other taxes and
any directly attributable expenditure on
making the asset ready for its intended use.

An item of an intangible asset is de¬
recognized on disposal or when no future
economic benefits are expected from its
use or disposal. The gains or losses arising
from de-recognition are measured as
the difference between the net disposal
proceeds and the carrying amount of the
asset and are recognized in the statement
of profit and loss when the asset is
derecognized.

Subsequent costs related to intangible
assets are recognised as a separate asset, as
appropriate, only when it is probable that
future economic benefits associated with
the item will flow to the Group and the cost
of the item can be measured reliably"

(iii) Capital Work In Progress

Capital work in progress are carried at cost,
comprising direct cost, related incidental
expenses during the construction
period, attributable borrowing costs

for the qualifying assets and other
expenses incurred in connection with
project implementation in so far as such
expenses relate to the period prior to the
commencement of commercial production.

(g) Depreciation and Amortisation

Depreciation on Property, Plant and Equipment
is provided on written down value method at
the rates arrived at on the basis of the estimated
economic useful life of the assets. The useful
life for building, plant & machinery & leasehold
improvements is considered as prescribed
in Schedule II of the Companies Act, 2013,
representing the management''s estimate of
the useful life of these assets and following
consistency with previous year.

Amortization of the intangible asset begins when
the asset is acquired and is available for use. It
is amortized over the period of expected future
benefit. Amortization expense is recognized
in the statement of profit and loss unless such
expenditure forms part of the carrying value
of another asset. The estimated useful life of
the intangible assets, amortization method
and the amortization period are reviewed at
the end of each financial year. Intangible assets
are amortized with a finite useful life using the
Written down value method.

The company''s computer software has an
estimated useful life of three years as its licence
is renewed after every three years

The company has estimated residual value of the
assets to be 5% of the cost of the asset"

(h) Revenue Recognition

"Revenue is recognized to the extent that it is
probable that the economic benefits will flow
to the Company and the revenue can be reliably
measured.

Sale of Goods

Revenue from sale of goods is recognized on
transfer of all significant risks and rewards related
to the ownership of such goods to the buyer.
Sales are stated net of trade discount, sales
return, duties and GST. Revenue is recognized
only when it can be reliably measured and it is
reasonable to expect ultimate collection

Sale of Services

Revenue is recognized based on contractual terms
and ratably over the period in which services
are rendered. Revenue from the end of the last
billing to the Balance Sheet date is recognized
as unbilled revenues. Revenue from fixed-price
and fixed-timeframe contracts, where there is no
uncertainty as to measurement or collectability
of consideration, is recognized based upon the
percentage-of-completion method.

Interest income

Interest income is recognized on time proportion
basis on interest rates implicit in the transaction.

Dividend Income

Dividend income is recognised on receipt basis.
Other Income

Other income is recognized based on the
contractual obligations on accrual basis.

Lease rentals are recognised on a straight line
basis over the period of lease.

Other Operating Revenue

Export incentives, production linked incentives
and subsidies are recognized when there is
reasonable assurance that the Company is
complying with the conditions and the incentive
will be received"

(i) Inventories

Inventories are valued at cost or net realisable
value, whichever is lower. Cost comprises of
all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories
to their present location and condition and is
determined on First in First Out (FIFO) method.
Net Realizable Value is the estimated selling
price in the ordinary course of business less
estimated cost of completion and the estimated
cost necessary to make the sale.

Raw materials, components, stores and spares
are valued at lower of cost and net realizable
value. However, materials and other items held
for use in production of inventories are not
written down below cost if the finished products
in which they will be incorporated are expected

to be sold at or above cost. Cost of raw materials,
components and stores and spares is determined
on First in First Out (FIFO) basis.

Finished goods are valued at lower of cost and
net realizable value. Cost of raw materials is
determined on First in First Out (FIFO) basis.

Work in progress and finished goods are valued
at lower of cost and net realizable value. Cost
includes direct material and labour and a
proportion of manufacturing overheads based
on normal operating capacity. Cost is determined
on First in First Out (FIFO) basis"

(j) Foreign Currency Transactions

Initial recognition

Foreign currency transactions are recorded in
the reporting currency which is Indian Rupee,
by applying to the foreign currency amount the
exchange rate between the reporting currency
and the foreign currency at the date of the
transaction.

Conversion

Monetary assets and liabilities in foreign
currency, which are outstanding as at the year-
end, are revalued at the year-end at the closing
exchange rate and the resultant exchange
differences are recognized in the Statement of
Profit and Loss at the year end.

Exchange Differences

All exchange differences are recognized as
income or as expenses in the period in which
they arise"

(k) Taxation

Income-tax expense comprises current tax and
deferred tax.

Current tax

Provision for current tax is made for the tax
liability payable on taxable income after
considering tax allowances, deductions and
exemptions determined in accordance with the
prevailing tax laws. The tax currently payable
is based on taxable profit for the year. Taxable
profit differs from ''profit before tax'' as reported
in the statement of profit and loss because of

items of income or expense that are taxable
or deductible in other years and items that are
never taxable or deductible. The company''s
current tax is calculated using the tax rates as
prescribed in the section 115BAA of the Income
Tax Act, 1961.

Deferred tax

Deferred tax liability or asset is recognized for
timing differences between the profits/losses
offered for income tax and profits/losses as per
the financial statements. Deferred tax assets and
liabilities are measured using the tax rates and
tax laws that have been enacted or substantively
enacted at the Balance Sheet date.

Deferred tax asset is recognized only to the extent
there is reasonable certainty that the assets can
be realized in future. However, where there is
unabsorbed depreciation or carried forward
loss under taxation laws, deferred tax asset on
such losses is recognized only if there is a virtual
certainty of their realization. Deferred tax assets
and liabilities are reviewed at each Balance Sheet
date and written down or written up to reflect
the amount that is reasonably/virtually certain
to be realized.

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 tax assets and deferred tax
relates to the same taxable entity and the same
taxation authority"

(l) Borrowing Cost

Borrowing costs to the extent related /
attributable to the acquisition / construction of
assets that takes substantial period of time to
get ready for their intended use are capitalized
along with the respective Property, Plant and
Equipment up to the date such asset is ready
for use. Other borrowing costs are recognised
as expense in the Statement of Profit and Loss in
the period in which they are incurred.

(m) Earning Per Share
Basic EPS

In determining earnings per share, the Company
considers the net profit / (loss) after tax and

includes the effect of extraordinary items in the
profit and loss account. The number of shares
used in computing basic earnings per share is the
weighted average number of shares outstanding
during the period. The weighted average
number of equity shares outstanding during
the period is adjusted for events such as bonus
issue and issue of fresh equity shares under IPO
that have changed the number of equity shares
outstanding at the year end.

Diluted EPS

For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of
all dilutive potential equity shares."

(n) Investment

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 fair value determined on
an individual investment basis. Long-term
investments are carried at cost. However,
provision for diminution in value is made to
recognize a decline other than temporary in the
value of the investments.

---

Mar 31, 2024

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation of Financials Statements

The Financial Statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material aspects with the accounting standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(b) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of financial statements which in management''s opinion are prudent and reasonable. Actual results may differ from the estimates used in preparing the accompanying financial statements. However, accounting estimates could change from period to period. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Any revision to accounting estimates is recognised prospectively in current and future periods and, if

material, their effects are disclosed in the notes to the Standalone financial statements.

(c) Functional and Presentation Currency

These financial statements are presented in Indian Rupees (C), the company''s functional currency. All Financial information presented in Indian Rupee has been rounded off to the nearest lakh as per the requirements of Schedule III of "the Act" unless otherwise stated.

(d) Current-Non-Current Classification

All assets and liabilities are classified into current and non-current

Assets

An asset is classified as current when it satisfies any of the following criteria:

i) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

ii) It is held primarily for the purpose of being traded;

iii) It is expected to be realized within 12 months after the reporting date; or

iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

i) It is expected to be settled in the Company''s normal operating cycle;

ii) It is held primarily for the purpose of being traded;

iii) It is due to be settled within 12 months after the reporting date;

iv) The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Current liabilities include the current portion of non-current financial liabilities. All other liabilities are classified as non-current.

(e) Operating Cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash

and cash equivalents. Based on the above definition and nature of business, the company has ascertained its operating cycle as less than 12 months for the purpose of current / non current classification of assets and liabilities.

(f) Property, Plant and Equipment Intangible Assets & CWIP

(i) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost less accumulated depreciation. The total cost of assets comprises its purchase price, freight, duties, taxes and any other incidental expenses directly attributable to bringing the asset to the working condition for its intended use and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets.

Subsequent costs related to an item of property, plant and equipment are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are recognized in statement of profit and loss during the reporting period when they are incurred.

An item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gains or losses arising from de-recognition are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(ii) Intangible Assets

Intangible assets are recognized if it is probable that the future economic benefits that are attributable to the assets will flow to the Company and cost of the assets can be measured reliably. The cost of intangible assets comprises its purchase price, including any duties and other taxes and any directly attributable expenditure on making the asset ready for its intended use.

An item of an intangible asset is de-recognized on disposal or when no future economic benefits are expected from its use or disposal. The gains or losses arising from de-recognition are measured

as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Subsequent costs related to intangible assets are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

(iii) Capital Work In Progress

Capital work in progress are carried at cost, comprising direct cost, related incidental expenses during the construction period, attributable borrowing costs for the qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production. Advances given towards the construction of the capital asset outstanding at each balance sheet date are disclosed as capital advances under long term loans and advances. In this financial year capitalised the C2773.95 Lakh on 30/03/24 expenses made upto 31/12/2023.

(g) Depreciation and Amortisation

Depreciation on Property, Plant and Equipment is provided on written down value method at the rates arrived at on the basis of the estimated economic useful life of the assets. The useful life for building, plant & machinery & leasehold improvements is considered as prescribed in Schedule II of the Companies Act, 2013, representing the management''s estimate of the useful life of these assets and following consistency with previous year.

Amortization of the intangible asset begins when the asset is acquired and is available for use. It is amortized over the period of expected future benefit. Amortization expene is recognized in the statement of profit and loss unless such expenditure forms part of the carrying value of another asset. The estimated useful life of the intangible assets, amortization method and the amortization period are reviewed at the end of each financial year. Intangible assets are amortized with a finite useful life using the Written down value method.

The company''s computer software has an estimated useful life of three years as its licence is renewed after every three years

The company has estimated residual value of the assets to be 5% of the cost of the asset.

(h) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue from sale of goods is recognized on transfer of all significant risks and rewards related to the ownership of such goods to the buyer. Sales are stated net of trade discount, sales return, duties and GST. Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection

Sale of Services

Revenue is recognized based on contractual terms and ratably over the period in which services are rendered. Revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage-of-completion method.

Interest income

Interest income is recognized on time proportion basis on interest rates implicit in the transaction.

Dividend Income

Dividend income is recognised on receipt basis.

Other Income

Other income is recognized based on the contractual obligations on accrual basis.

Lease rentals are recognised on a straight line basis over the period of lease.

Other Operating Revenue

Export incentives, production linked incentives and subsidies are recognized when there is reasonable assurance that the Company is complying with the conditions and the incentive will be received.

(i) Inventories

nventories are valued at cost or net realisable value, whichever is lower. Cost comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition and is determined on First in First Out (FIFO) method. Net Realizable Value is the estimated selling price in the ordinary course of business less

estimated cost of completion and the estimated cost necessary to make the sale.

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on First in First Out (FIFO) basis. Finished goods are valued at lower of cost and net realizable value. Cost of raw materials is determined on First in First Out (FIFO) basis.

Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct material and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost is determined on First in First Out (FIFO) basis.

(j) Foreign Currency Transactions Initial recognition

Foreign currency transactions are recorded in the reporting currency which is Indian Rupee, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are revalued at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss at the year end.

Exchange Differences

All exchange differences are recognized as income or as expenses in the period in which they arise.

(k) Taxation

Income-tax expense comprises current tax and deferred tax.

Current tax

Provision for current tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because

of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The company''s current tax is calculated using the tax rates as prescribed in the section 115BAA of the Income Tax Act, 1961.

Deferred tax

Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income tax and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date.

Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax asset on such losses is recognized only if there is a virtual certainty of their realization. Deferred tax assets and liabilities are reviewed at each Balance Sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized.

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 tax assets and deferred tax relates to the same taxable entity and the same taxation authority.

(l) Borrowing Cost

Borrowing costs to the extent related / attributable to the acquisition / construction of assets that takes substantial period of time to get ready for their intended use are capitalized along with the respective Property, Plant and Equipment up to the date such asset is ready for use. Other borrowing costs are recognised as expense in the Statement of Profit and Loss in the period in which they are incurred.

(m) Earning Per Share Basic EPS

In determining earnings per share, the Company considers the net profit / (loss) after tax and includes the effect of extraordinary items in the profit and loss account. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue and issue of fresh equity shares under IPO that have

changed the number of equity shares outstanding at the year end.

Diluted EPS

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(n) Investment

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 fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

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Mar 31, 2023

1 CORPORATE INFORMATION

The Company was originally incorporated as a Partnership Firm as "M/s Annapurna Agro Industries"

vide partnership deed dated November 27, 2015. The Partnership Firm was subsequently converted into Private Limited Company Annapurna Swadisht Private Limited on February 11, 2022. Further the Company was converted into a Public Limited Company and consequently, the name of the Company was changed to Annapurna Swadisht Limited with effect from July 8, 2022. The company is MSME as per Udyam Reg. No. UDYAM-WB-10-0047971.

The Company has made an Initial public offer, the issue opening date was September 15, 2023 and the issue closing date was September 19, 2023. The company got listed on SME Platform of NSE during the financial year 2022-23 w.e.f. September 27, 2022.

The Company is engaged in the business of Manufacturing of Food Products.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation of Financials Statements

The Financial Statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material aspects with the accounting standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(b) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of financial statements which in management''s opinion are prudent and reasonable. Actual results may differ from the estimates used in preparing the accompanying financial statements. However, accounting estimates could change from period to period. Appropriate changes in estimates are

made as the Management becomes aware of changes in circumstances surrounding the estimates. Any revision to accounting estimates is recognised prospectively in current and future periods and, if material, their effects are disclosed in the notes to the Standalone financial statements.

(c) Functional and Presentation Currency

These financial statements are presented in Indian Rupees (D.), the company''s functional currency. All Financial information presented in Indian Rupee has been rounded off to the nearest lakh as per the requirements of Schedule III of the Act unless otherwise stated.

(d) Current-Non-Current Classification

All assets and liabilities are classified into current and non-current

Assets

An asset is classified as current when it satisfies any of the following criteria:

i) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

ii) It is held primarily for the purpose of being traded;

iii) It is expected to be realized within 12 months after the reporting date; or

iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

i) It is expected to be settled in the Company''s normal operating cycle;

ii) It is held primarily for the purpose of being traded;

iii) It is due to be settled within 12 months after the reporting date;

iv) The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Current liabilities include the current portion of non-current financial liabilities. All other liabilities are classified as non-current.

(e) Operating Cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. Based on the above definition and nature of business, the company has ascertained its operating cycle as less than 12 months for the purpose of current / non current classification of assets and liabilities.

(f) Property, Plant and Equipment Intangible Assets & CWIP

(i) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost less accumulated depreciation. The total cost of assets comprises its purchase price, freight, duties, taxes and any other incidental expenses directly attributable to bringing the asset to the working condition for its intended use and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets.

Subsequent costs related to an item of property, plant and equipment are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are recognized in statement of profit and loss during the reporting period when they are incurred.

An item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gains or losses arising from de-recognition are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(ii) Intangible Assets

Intangible assets are recognized if it is probable that the future economic benefits that are attributable to the assets will flow to the Company and cost of the assets can be measured reliably. The cost of intangible assets comprises its purchase price, including any duties and other taxes and any directly attributable expenditure on making the asset ready for its intended use.

An item of an intangible asset is de-recognized on disposal or when no future economic benefits are expected from its use or disposal. The gains or losses arising from de-recognition are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Subsequent costs related to intangible assets are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

(iii) Capital Work In Progress

Capital work in progress are carried at cost, comprising direct cost, related incidental expenses during the construction period, attributable borrowing costs for the qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production. Advances given towards the construction of the capital asset outstanding at each balance sheet date are disclosed as capital advances under long term loans and advances.

(g) Depreciation and Amortisation

Depreciation on Property, Plant and Equipment is provided on written down value method at the rates arrived at on the basis of the estimated economic useful life of the assets. The useful life for building, plant & machinery & leasehold improvements is considered as prescribed in Schedule II of the Companies Act, 2013, representing the management''s estimate of the useful life of these assets and following consistency with previous year.

Amortization of the intangible asset begins when the asset is acquired and is available for use. It is amortized over the period of expected future benefit. Amortization expense is recognized in the statement of profit and loss unless such expenditure forms part of the carrying value of another asset. The estimated useful life of the intangible assets, amortization method and the amortization period are reviewed at the end of each financial year. Intangible assets are amortized with a finite useful life using the Written down value method.

The company''s computer software has an estimated useful life of three years as its licence is renewed after every three years

The company has estimated residual value of the assets to be 5% of the cost of the asset.

(h) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue from sale of goods is recognized on transfer of all significant risks and rewards related to the ownership of such goods to the buyer. Sales are stated net of trade discount, sales return, duties and GST. Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection

Sale of Services

Revenue is recognized based on contractual terms and ratably over the period in which services are rendered. Revenue from the end of the last billing to the Balance Sheet date is recognized as unbilled revenues. Revenue from fixed-price and fixed-timeframe contracts, where there is no uncertainty as to measurement or collectability of consideration, is recognized based upon the percentage-of-completion method.

Interest income

Interest income is recognized on time proportion basis on interest rates implicit in the transaction.

Dividend Income

Dividend income is recognised on receipt basis.

Other Income

Other income is recognized based on the contractual obligations on accrual basis.

Lease rentals are recognised on a straight line basis over the period of lease.

Other Operating Revenue

Export incentives, production linked incentives and subsidies are recognized when there is reasonable assurance that the Company is complying with the conditions and the incentive will be received.

(i) Inventories

Inventories are valued at cost or net realisable value, whichever is lower. Cost comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition and is determined on First in First Out (FIFO) method. Net Realizable Value is the estimated selling price in the ordinary course of business less estimated cost of completion and the estimated cost necessary to make the sale.

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost ofraw materials, components and stores and spares is determined on First in First Out (FIFO) basis. Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct material and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost is determined on First in First Out (FIFO) basis.

(j) Foreign Currency Transactions Initial recognition

Foreign currency transactions are recorded in the reporting currency which is Indian Rupee, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are revalued at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss at the year end.

Exchange Differences

All exchange differences are recognized as income or as expenses in the period in which they arise.

(k) Taxation

Income-tax expense comprises current tax and deferred tax.

Current tax

Provision for current tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The company''s current tax is calculated using the tax rates as prescribed in the section 115BAA of the Income Tax Act, 1961.

Deferred tax

Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income tax and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using

the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax asset on such losses is recognized only if there is a virtual certainty of their realization. Deferred tax assets and liabilities are reviewed at each Balance Sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized. 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 tax assets and deferred tax relates to the same taxable entity and the same taxation authority.

(l) Borrowing Cost

Borrowing costs to the extent related / attributable to the acquisition / construction of assets that takes substantial period of time to get ready for their intended use are capitalized along with the respective Property, Plant and Equipment up to the date such asset is ready for use. Other borrowing costs are recognised as expense in the Statement of Profit and Loss in the period in which they are incurred.

(m) Earning Per Share Basic EPS

In determining earnings per share, the Company considers the net profit / (loss) after tax and includes the effect of extraordinary items in the profit and loss account. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue and issue of fresh equity shares under IPO that have changed the number of equity shares outstanding at the year end.

Diluted EPS

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(n) Investment

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 fair value determined on an individual investment basis. Long-term investments are carried at

cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(o) Provisions, Contingent Liabilities and Contingent AssetsProvisions

A provision is recognized when an enterprise 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 their present values and are determined based on management estimates of the obligation required to settle at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Provision for warranties:

The estimated liability for product warranties is recognised when products are sold. These estimates are established using historical information based on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise. The company accounts for the provision for warranties on the basis of information available to the management duly taking into account the current and past technical estimates.

Contingent Liabilities:

Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events not wholly within the control of the Company. When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets:

Contingent assets are not disclosed in the financial statement unless an inflow of economic benefit is probable.

(p) Cash and Cash Equivalents

Cash and Cash Equivalents in the balance sheet comprise cash at banks, cash in hand, term deposits, and fixed deposits kept as security / margin money for more than 3 months but less than 12 months. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash in hand, bank balances in current accounts and bank deposits, as defined above, as they are considered an integral part of the Company''s cash management. The deposits maintained by the Company with banks

comprise of deposits, which can be withdrawn by the Company at any point without prior notice or penalty on the principal.

(q) Government Grants and Production Linked IncentivesGovernment grants:

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset the cost of the asset is shown at gross value and grant thereon is treated as capital grant. The capital grant will be recognised as income in the statement of profit and loss over the period and in proportion in which depreciation is charged. Revenue grants are recognised in the statement of profit and loss in the same period as the related cost, which they are intended to compensate are accounted for.

Production Linked Incentive:

Production Linked Incentives are recognised as income when, on the basis of the judgment of the management and based on the supporting data with respect to the eligibility conditions, the Company fulfils the eligibility conditions as per the approval letter. The management applies its judgement for the recognition of incentive income based on the management''s assessment for likelihood of recoverability.

(r) Impairment of Assets

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset''s net selling price or value in use, which

means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(s) Research and Development Expenditure

Research and development expenditure that do not meet the criteria for the recognition of intangible assets are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

(t) Subsequent Expenditure

Subsequent expenditure is recognised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

(u) Cash Flow Statement

Cash flows are reported using the indirect method as per Accounting Standard 3, Cash Flow Statements, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from the operating, investing and financing activities of the company are segregated. The company considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.