Accounting Policies of Avro India Ltd. Company

Mar 31, 2025

E. Summary of Material Accounting Policy Information

A summary of the material accounting policy information applied in the preparation of the financial
statements are as given below. These accounting policies have been applied consistently to all periods
presented in the financial statements.

1. Current and non-current classification

Based on the time involved between the acquisition of assets for processing and their realization in
cash and cash equivalents, the Company has determined twelve months as its operating cycle for the
purpose of classification of its assets and liabilities as current and non-current in the balance sheet.

Deferred tax assets and liabilities are classified as non-current assets and liabilities

2. Property, plant and equipment

Property, plant and equipment are initially stated at cost.

The cost of property, plant and equipment includes:

(a) its purchase price, net of any trade discount and rebates including non-refundable purchase taxes
and import duty;

(b) any costs directly attributable to bringing the asset to the location and condition necessary for it
to be capable of operating in the manner intended by management

The borrowing costs that meet the criteria for capitalization as part of a qualifying asset, then these
costs shall be included in the cost of property, plant, and equipment.

Property, plant and equipment are subsequently measured at cost net of accumulated depreciation
and accumulated impairment losses, if any. Subsequent costs are included in the assets carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably.

Depreciation on property, plant and equipment is provided on written down value method over the
estimated useful lives of the assets as specified under part C of schedule II of the Companies Act, 2013
and disclosed in the notes to accounts. The residual values are not more than 5% of the original cost of
assets.

Property, plant and equipment acquired during the period, individually costing up to Rs. 15,000/- are
fully depreciated.

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

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in statement of profit or loss within other gains/(losses).

The Cost of leasehold land is not amortised over the period of lease because it is perpetual in nature.

3. Capital work-in-progress

Capital work-in-progress comprises of property, plant and equipment that are not ready for their
intended use at the end of reporting period and are carried at cost comprising direct costs, related
incidental expenses, other directly attributable costs and borrowing costs.

4. Intangible Assets

Intangible asset comprising of computer software (Payroll Software) are stated at cost of acquisition
less accumulated amortisation and any accumulated impairment losses, if any.

The intangible asset is amortised over a period of 60 months, on a straight-line basis, as per
management estimate of its useful life, over which economic benefits are expected to be realized.

5. Financial Instruments

The Company recognises financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument..

i) Financial asset

a) Initial measurement

All financial assets (excluding trade receivables which is measured at transaction price) are
recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of
financial asset. Transaction costs directly attributable to the acquisition of financial assets carried at
fair value through profit or loss are expensed in statement of profit and loss.

b) Subsequent measurement

Subsequent measurement of financial asset depends on the Company business model for managing
the asset and the cash flow characteristics of the asset. The Company classifies its financial asset as:

Financial Assets at amortised cost

After initial measurement, the financial assets that are held for collection of contractual cash flows
where those cash flow represent solely payments of principal and interest (SPPI) on the principal
amount outstanding are measured at amortised cost using the effective interest rate (EIR) method.
Interest income from these financial assets is included in other income.

Financial Assets at fair value through other comprehensive income

Financial instruments included within FVTOCI category are measured initially as well as at each
reporting period at fair value plus transaction costs. Fair value movements are recognised in other
comprehensive income (OCI). However, the Company recognises interest income, impairment losses
& reversals and foreign exchange gain loss in statement of profit and loss. On derecognition of the
asset, cumulative gain or loss previously recognised in OCI is reclassified from equity to profit and loss.

Financial Assets at fair value through profit and loss

Fair value through profit and loss is the residual category. Any financial instrument which does not
meet the criteria for categorization as at amortized cost or fair value through other comprehensive
income is classified at FVTPL.

Financial instruments included within FVTPL category are measured initially as well as at each reporting
period at fair value plus transaction costs. Fair value movements are recorded in statement of profit
and loss.

Impairment of financial assets

The Company applies the expected credit loss (ECL) model for recognising impairment loss on
financial assets measured at amortised cost, trade receivables, and other contractual rights to receive
cash or other financial asset.

For trade receivables and contract assets, the Company follows ’simplified approach’ and measures
the loss allowance at an amount equal to lifetime expected credit losses.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial recognition.
If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as expense/
income in the statement of profit and loss.

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the
balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria,
the company does not reduce impairment allowance from the gross carrying amount.

ii) Financial liability

a) Initial measurement

All financial liabilities are recognised initially at fair value net of directly attributable transaction costs.
The Company’s financial liabilities include loans and borrowings, trade and other payables and other
financial liabilities etc.

b) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

After initial recognition, trade payables are measured at transaction price whereas the borrowings and
other financial liabilities are subsequently measured at amortised cost using the EIR (Effective Interest
Rate) method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as
finance costs in the statement of profit and loss.

6. Fair value measurement of financial instruments

The company measures financial instruments at fair value at each reporting period.

All assets and liabilities for which fair value is measured, are disclosed in the financial statements are
categorised within the level 1 (quoted price unadjusted in active market), level 2 (Valuation techniques
for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable) and level 3 (Valuation techniques for which the lowest level input that is significant to the
fair value measurement is unobservable) of fair value hierarchy.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.

7. Inventories

Inventories are valued at lower of cost and net realizable value.

Inventories includes raw material, work-in-progress, finished goods, store & spare, packing material.

Raw material and components: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined using first in first out (FIFO) basis.

Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion
of manufacturing overheads based on the normal operating capacity but excluding borrowing costs.
Cost is determined on weighted average basis.

Store, spare parts, packing material etc.: Cost is determined on FIFO basis.

Inter branch transfers are valued at works/factory costs of the transferor unit/ branch.

8. Employee Benefits

a. Short term employee benefits: Employee benefits such as salaries falling due wholly within twelve
months of rendering the service are classified as short-term employee benefits and undiscounted
amount of such benefits are expensed in the statement of profit and loss in the period in which the
employee renders the related services.

b. Post-employment benefits

Defined contribution plan: A defined contribution plan is a plan under which the Company pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution plans are recognized as an employee
benefits expense in the statement of profit and loss during the period in which the employee renders
the related services.

Contribution to Defined Contribution Plans such as Provident Fund and Employees'' State Insurance
Corporation are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plan: A defined benefit plan is a post-employment benefit plan other than a defined
contribution plan. Under such plans, the obligation for any benefits remains with the Company. The
company''s liability towards gratuity is in the nature of defined benefit plans.

Remeasurement of net defined benefit liability, which comprises actuarial gains and losses and the
return on plan assets (excluding interest) and the effect of the asset ceiling (if any excluding interest),
are recognized immediately in other comprehensive income.

9. Foreign Exchange Transactions

Foreign currency transactions are recorded at exchange rates prevailing on the date of the
transaction. Foreign currency monetary items are retranslated at each reporting date. The exchange
gains and losses arising on settlement and restatement are recognised in the statement of profit and
loss. Non-monetary items which are measured in terms of historical cost denominated in foreign
currencies are translated using the exchange rates at the dates of the initial transactions.

10. Borrowing Costs

Borrowing costs consist of interest and other costs that the Company incurs in connection with the
borrowing of funds and are charged to the statement of profit and loss in the period in which they are
incurred except when it meets the criteria for capitalization as part of qualifying assets.

11. Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to
determine whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

If such assets are considered to be impaired, the impairment to be recognised in the Statement of
Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the
estimated recoverable amount of the asset.

12. Revenue Recognition
Sale of products

Revenue from sale of goods is recognised when control of the products being sold is transferred to the
customer and when there are no longer any unfulfilled obligations. The Performance Obligations in our
contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending
on terms with customers. Revenue is measured on the basis of transaction price, which is the
consideration, adjusted for volume discounts, rebates, schemes allowances, price concessions,
incentives and returns, if any, as specified in the contracts with the customers. Accumulated
experience is used to estimate the provision for such discounts and rebates. Revenue is only
recognised to the extent that it is highly probable a significant reversal will not occur.

Sales return - Our customers have the contractual right to return goods only when authorised by the
Company. An estimate is made of goods that will be returned and a liability is recognised for this
amount using a best estimate based on accumulated experience. The Company deals in various
products and operates in various distribution channels. Accordingly, the estimate of sales returns is
determined primarily by the Company''s historical experience in the markets in which the Company
operates by considering actual sales returns, estimated shelf life and other factors.

13. Other Income

Income from services rendered including commission income

• Income from services rendered including the commission income is recognised based on
agreements/arrangements as the service is performed and there are no unfulfilled obligations.

• Interest income is recognised using Effective Interest rate method.

• Dividend income on investments is recognised when the right to receive dividend is established

• All other income is accounted on accrual basis when no significant uncertainty exists regarding the
amount that will be received.

14. Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
unrestricted cash and short-term deposits with original maturities of three months and less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change
in value.

15. Taxes

Tax expense comprises current tax and deferred income tax. Current and deferred tax are recognised
in the statement of profit & loss except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also
recognised in other comprehensive income or directly in equity, respectively.

Current income Tax

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

Current income tax is recognised in statement of profit and loss. 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.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred Tax

Deferred tax is provided for temporary taxable/deductible difference arising on the difference of tax
base and accounting base of assets/liabilities using the liability method and are measured at the
enacted tax rates or substantively enacted tax rates at reporting date.

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. Any such reduction shall be reversed to the extent that it becomes
probable that sufficient taxable profit will be available. 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 profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority.

16. Earnings per share

In determining basic earnings per share, the company considers the net profit attributable to equity
shareholders. The number of shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period.

In determining diluted earnings per share, the net profit attributable to equity shareholders and
weighted average number of shares outstanding during the period are adjusted for the effect of all
dilutive potential equity shares.

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Mar 31, 2024

1. CORPORATE INFORMATION AND MATERIAL ACCOUNTING POLICIES

A. Corporate Information

AVRO INDIA LIMITED (the "Company") is a public limited company domiciled in India, incorporated under the provisions of the Companies Act and limited by shares (CIN: L25200UP1996PLC101013). The Company''s shares are listed and actively traded on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) Limited. The registered office of the Company is situated at A-7/36-39, South of G.T. Road Industrial rea Electrosteel Casting Compound Ghaziabad, Uttar Pradesh - 201009, India. The Company is primarily engaged in the manufacturing and selling of plastic moulded furniture and granules. It has established brand names including "AVON FURNITURE" and "AVRO FURNITURE" among others. The Company''s products are distributed through both online and offline channels, with a network of retailers across India and major distributors concentrated in the state of Uttar Pradesh.

B. Basis of preparation of Financial Statements:

1. Statement of Compliance

The financial statements of the Company have been prepared on going concern basis following accrual system of accounting and in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read together with Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements.

These financial statements were approved for issue by the Board of Directors in its meeting held on May 27, 2024.

2. Basis of measurement

The financial statements have been prepared under the historical cost convention except for the following assets and liabilities which have been measured at fair value:

• Certain financial assets and liabilities that are measured at fair value; and

• Plan assets in the case of employees defined benefit plans that are measured at fair value.

3. Functional and presentation currency:

These Financial Statements are presented in Indian Rupees (INR) which is the Company''s functional currency. All amounts have been rounded to the nearest lakh upto two decimals except for per share data, unless otherwise stated.

C. Significant accounting estimates and judgments

The preparation of Financial Statements requires the management to make judgments, accounting estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

This note provides an overview of the areas that involved a higher degree of judgment or omplexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Significant areas of estimation and judgments as stated in the respective accounting policies t hat have the most significant effect on the financial statements are as follows:

i) Determination of the estimated useful lives of Property Plant and Equipment

The useful lives of dies and molds are determined by the technical expert, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers'' warranties and maintenance support

ii) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the nature of business differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments that will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. The company establishes provisions, based on reasonable estimates.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment 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.

iii) Impairment of non-financial assets

The entity assesses at each reporting date whether there is an indication that an asset may be impaired. Determining the recoverable amount of the assets is judgmental and involves the use of significant estimates and assumptions. The estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and do not reflect unanticipated events and circumstances that may occur.

iv) Impairment of financial assets

The impairment provision for financial assets is based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, credit risk, and existing market conditions as well as forward looking estimates at the end of each reporting period.

D. New Standards, Interpretations and Amendments Adopted by the Company

Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

E. Summary of Material Accounting Policies

A summary of the material accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.

1. Current and non-current classification

Based on the time involved between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined twelve months as its operating cycle for the purpose of classification of its assets and liabilities as current and non-current in the balance sheet.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2. Property, plant and equipment

Property, plant and equipment are initially stated at cost. The cost of property, plant and equipment includes:

a. its purchase price, net of any trade discount and rebates including non-refundable purchase taxes and import duty;

b. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The borrowing costs that meet the criteria for capitalization as part of a qualifying asset, then these costs shall be included in the cost of property, plant, and equipment.

Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Depreciation on property, plant and equipment is provided on written down value method over the estimated useful lives of the assets as specified under part C of schedule II of the Companies Act, 2013 and disclosed in the notes to accounts. The residual values is not more than 5% of the original cost of assets.

Property, plant and equipment acquired during the period, individually costing up to Rs. 15000/- are fully depreciated.

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

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in statement of profit or loss within other gains/(losses).

The Cost of leasehold land is not amortised over the period of lease because it is perpetual in nature.

3. Capital work-in-progress

Capital work-in-progress comprises of property, plant and equipment that are not ready for their intended use at the end of reporting period and are carried at cost comprising direct costs, related incidental expenses, other directly attributable costs and borrowing costs.

4. Intangible Assets

Intangible asset comprising of computer software (Payroll Software) are stated at cost of acquisition less accumulated amortisation and any accumulated impairment losses, if any.

The intangible asset are amortised over a period of 60 months, on a straight-line basis, as per management estimate of its useful life, over which economic benefits are expected to be realized.

5. Financial Instruments

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.

i) Financial asset

a) Initial measurement

All financial assets (excluding trade receivables which is measured at transaction price) are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of financial asset. Transaction costs directly attributable to the acquisition of financial assets carried at fair value through profit or loss are expensed in statement of profit and loss.

b) Subsequent measurement

Subsequent measurement of financial asset depends on the Company business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its financial asset as:

Financial Assets at amortised cost

After initial measurement, the financial assets that are held for collection of contractual cash flows where those cash flow represent solely payments of principal and interest (SPPI) on the principal amount outstanding are measured at amortised cost using the effective interest rate (EIR) method. Interest income from these financial assets is included in other income.

Financial Assets at fair value through other comprehensive income

Financial instruments included within FVTOCI category are measured initially as well as at each reporting period at fair value plus transaction costs. Fair value movements are recognised in other comprehensive income (OCI). However, the Company recognises interest income, impairment losses & reversals and foreign exchange gain loss in statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from equity to profit and loss.

Financial Assets at fair value through profit and loss

Fair value through profit and loss is the residual category. Any financial instrument which does not meet the criteria for categorization as at amortized cost or fair value through other comprehensive income is classified at FVTPL.

Financial instruments included within FVTPL category are measured initially as well as at each reporting period at fair value plus transaction costs. Fair value movements are recorded in statement of profit and loss.

Impairment of financial assets

The Company applies the expected credit loss (ECL) model for recognising impairment loss on financial assets measured at amortised cost, trade receivables, and other contractual rights to receive cash or other financial asset.

For trade receivables and contract assets, the Company follows ''simplified approach'' and measures the loss allowance at an amount equal to lifetime expected credit losses.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as expense/ income in the statement of profit and loss

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce impairment allowance from the gross carrying amount.

ii) Financial liability

a)Initial measurement

All financial liabilities are recognised initially at fair value net of directly attributable transaction costs. The Company''s financial liabilities include loans and borrowings, trade and other payables and other financial liabilities etc.

b)Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

After initial recognition, trade payables are measured at transaction price whereas the borrowings and other financial liabilities are subsequently measured at amortised cost using the EIR (Effective Interest Rate) method. Amortised cost is calculated by taking nto account any discount or premium on acquisition and fees or costs that are an

ntegral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

6. Fair value measurement of financial instruments

The company measures financial instruments at fair value at each reporting period.

All assets and liabilities for which fair value is measured, are disclosed in the financial statements are categorised within the level 1 (quoted price unadjusted in active market), level 2 (Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable) and level 3 (Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable) of fair value hierarchy.

The fair value of an asset or a liability is measured using the assumptions that marke participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

7. Inventories

Inventories are valued at lower of cost and net realizable value.

Inventories includes raw material, work-in-progress, finished goods, store & spare, packing material. Raw material and components: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined using first in first out (FIFO) basis. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost is determined on weighted average basis.

Store, spare parts, packing material etc.: Cost is determined on FIFO basis.

Inter branch transfers are valued at works/factory costs of the transferor unit/ branch.

8. Employee Benefits

a. Short term employee benefits: Employee benefits such as salaries falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and undiscounted amount of such benefits are expensed in the statement of profit and loss in the period in which the employee renders the related services.

b. Post-employment benefits:

Defined contribution plan: A defined contribution plan is a plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefits expense in the statement of profit and loss during the period in which the employee renders the related services.

Contribution to Defined Contribution Plans such as Provident Fund and Employees'' State Insurance Corporation are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plan: A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Under such plans, the obligation for any benefits remains with the Company. The company''s liability towards gratuity is in the nature of defined benefit plans. Remeasurement of net defined benefit liability, which comprises actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any excluding interest), are recognized immediately in other comprehensive income.

9. Foreign Exchange Transactions

Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency monetary items are retranslated at the each reporting date. The exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss. Nonmonetary items which are measured in terms of historical cost denominated in foreign currencies are translated using the exchange rates at the dates of the initial transactions.

10. Borrowing Costs

Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds and are charged to the statement of profit and loss in the period in which they are incurred except when it meets the criteria for capitalization as part of qualifying assets.

11. Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

If such assets are considered to be impaired, the impairment to be recognised in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset.

12. Revenue Recognition Sale of products

Revenue from sale of goods is recognised when control of the products being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on terms with customers. Revenue is measured on the basis of transaction price, which is the consideration, adjusted for volume discounts, rebates, schemes allowances, price concessions, incentives and returns, if any, as specified in the contracts with the customers. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

Sales return - Our customers have the contractual right to return goods only when authorised by the Company. An estimate is made of goods that will be returned and a liability is recognised for this amount using a best estimate based on accumulated experience. The Company deals in various products and operates in various distribution channels. Accordingly, the estimate of sales returns is determined primarily by the Company''s historical experience in the markets in which the Company operates by considering actual sales returns, estimated shelf life and other factors.

13. Other Income

Income from services rendered including commission income

- I ncome from services rendered including the commission income is recognised based on agreements/arrangements as the service is performed and there are no unfulfilled obligations.

- Interest income is recognised using Effective Interest rate method.

- Dividend income on investments is recognised when the right to receive dividend is established

- All other income is accounted on accrual basis when no significant uncertainty exists regarding the amount that will be received.

14. Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes unrestricted cash and short-term deposits with original maturities of three months and less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

15. Taxes

Tax expense comprises current tax and deferred income tax. Current and deferred tax are recognised in the statement of profit & loss except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively.

Current income Tax

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

Current income tax is recognised in statement of profit and loss. 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.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred Tax

Deferred tax is provided for temporary taxable/deductible difference arising on the difference of tax base and accounting base of assets/liabilities using the liability method and are measured at the enacted tax rates or substantively enacted tax rates at reporting date.

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. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

16. Earnings per share

In determining basic earnings per share, the company considers the net profit attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.

In determining diluted earnings per share, the net profit attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

17. Provisions, Contingent Assets and Contingent Liabilities a) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, 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. This provision are reviewed at each reporting date and adjusted to reflect the current best estimates.

b) Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation or present obligations that may but probably will not, require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made. Contingent liabilities has been disclosed as a part of notes to account. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

17) Material prior period errors

Errors/omissions discovered in the current year relating to prior periods are treated as immaterial and adjusted during the current year, if all such errors and omissions in aggregate does not exceed 0.50% of total operating revenue as per last audited financial statement of the Company.

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Mar 31, 2023

E. Significant accounting policies

A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.

1. Property, plant and equipment:

1.1 Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

The cost of an item of property, plant and equipment comprises:

Its purchase price, including import duties and nonrefundable purchase taxes, after deducting trade discounts and rebates.

Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either

when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognised in profit or loss.

Items such as spare parts, stand-by equipment''s and servicing that meets the definition of property, plant anc equipment are capitalised at cost and depreciated over the useful life.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plan and equipment is recognised in profit or loss.

1.2 Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

1.3. Decommissioning costs

The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met

1.4. De-recognition

Property, plant and equipment is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on de-recognition of an item of property, plant and equipment are determined as the difference between sale proceeds from disposal, if any, and the carrying amount of

property, plant and equipment and are recognized in the statement of profit and loss. In circumstance, where an item of property, plant and equipment is abandoned, the net carrying cost relating to the property, plant and equipment is written off in the same period.

1.5 Depreciation/Amortization

Depreciation on property plant and equipment is provided on the written down value method over the useful lives of assets as specified in Schedule II of the Companies Act, 2013. Management believes that these useful lives best represent the period over which management expects to use these assets.

Useful life of property plant and equipment are reviewed at each balance sheet date and adjusted prospectively, if appropriate.

Cost of leasehold land is not amortised over the period of lease because it is perpetual in nature.

Depreciation on addition to assets or on sale / discardment of assets, is calculated pro rata from the date of such addition or upto the date of such sale/ discardment, as the case may be;

Assets like mobile phones, telephone instruments, etc. are fully depreciated in the year of purchase/acquisition;

Individual assets except assets given on lease acquired for less than '' 15,000/- are depreciated entirely in the year of acquisition.

2. Capital work-in-progress

Cost incurred for property, plant and equipment that are not ready for their intended use as on the reporting date, is classified under capital work- in-progress. The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and the borrowing costs attributable to the acquisition or construction of qualifying asset. Expenses directly attributable to

construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets. Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors. Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for on estimated basis as per terms of the contracts

3. Intangible Assets

3.1. Recognition and measurement

Intangible assets, which are acquired by the Company and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.

All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

3.2. Subsequent expenditure

Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably

3.3 Amortisation:

Software (Intangible assets) are amortised over their estimated useful lives on a straight-line basis but not exceeding the period of 60 months.

Useful life of Intangible assets is reviewed at each balance sheet date and adjusted prospectively, if appropriate.

4. Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial

instruments also include derivative contracts such as foreign currency foreign exchange forward contracts and, interest rate swaps and currency options; and embedded derivatives in the host contract.

Financial instruments also covers contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity''s expected purchase, sale or usage requirements.

Derivatives are currently recognized at fair value on the date on which the derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.

5. Cash Flow Hedges

The Company uses derivative financial instrument such as forward contracts and cross currency interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the Statement of Profit and Loss, except for the effective portion of cash flow hedge, which is recognised in Other Comprehensive Income and accumulated in Cash Flow Hedge Reserve included in the Reserves and Surplus while any ineffective portion is recognised immediately in the Statement of Profit and Loss.

For the purpose of hedge accounting, hedges are classified as:

Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability.

Cash flow hedges when hedging exposure to variability in cash flows that is either attributable to particular risk associated with a recognised asset or liability.

At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the effectiveness of changes in the hedging instrument''s fair value in offsetting the exposure to changes in the hedged item''s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedge accounting is discontinued from the last testing date when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Cumulative gain or loss on such hedging instrument recognised in Cash Flow Hedge Reserve is retained there until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in Cash Flow Hedge Reserve is transferred to Statement of Profit and Loss for the year.

6. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or

equity instrument of another entity. The Company recognizes a financial asset or a financial liability only when it becomes party to the contractual provisions of the instrument.

6.1 Financial Assets

Classification

The Company shall classify financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Debt instruments at amortised cost

A ‘debt instrument'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by- instrument basis.

The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘passthrough'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.

b) Trade receivables - The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. Trade receivables are tested for impairment on a specific basis after considering the sanctioned credit limits, security like letters of credit, security deposit collected etc. and expectations about future cash flows.

6.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable and incremental transaction cost.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments. Borrowings are measured at amortised cost.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different

terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

6.3. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

7. Investment Property

Investment properties are properties held to earn rental or for capital appreciation or for both and are not intended to be used in the operations of the Company. Investment properties are measured initially at its cost, including transaction costs. Cost of investment property comprises its purchase price and any directly attributable expenditure. Investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are expensed when incurred. Investment properties are depreciated / amortised considering the significant accounting policy no.1.5. Leasehold Land (Perpetual in

nature) and Properties under construction are not depreciated.

A property shall be transferred to or from investment property when, and only when, there is change in use. A change in use occurs when the property meets, or ceases to meet the definition of investment property and there is evidence of the change in use.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

8. Valuation of Inventories:

Inventories includes raw material, work-in-progress, finished goods, store & spare, packing material are valued at lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Raw material and components: Cost includes cost of purchases and other costs incurred in bringing the inventories to their present location and condition. Cost is determined using first in first out (FIFO) basis.

Finished Goods: Cost includes cost of direct material, labor, other direct cost and a proportion of fixed manufacturing overhead allocated based on the normal operating capacity but excluding borrowing cost. Cost is determined on weighted average cost basis.

Store, spare parts, packing material etc.: Cost is determined on FIFO basis.

Inter divisional transfers are valued at works/factory costs of the transferor unit/ division, plus transport and other charges.

9. Employee Benefits:

9.1 Short Term Employee Benefits

All employee benefits payable within twelve months of rendering the service are recognised in the period in which the employee renders the related service.

Post Employment / Retirement Benefits

Contribution to Defined Contribution Plans such as Provident Fund, Employees'' State Insurance Corporation, etc., are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plans - The present value of the obligation under such plans is determined based on an actuarial valuation by an independent actuary at the end of each year, using the Projected Unit Credit Method. In the case of gratuity, which is funded, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognise the obligation on net basis.

Remeasurement of net defined benefit liability, which comprises actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any excluding interest), are recognized immediately in other comprehensive income.

9.2 Other Long Term Employee Benefits Compensated Absences

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year-end are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount

expected to be paid as a result of the unused entitlement as at the year-end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year- end are treated as other long-term employee benefits. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

10. Foreign Exchange Transactions:

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognised in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the exchange rate as at the date of the transaction.

11. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset till the date it is ready for its intended use or sale. Income earned on temporary investment made out of the borrowings pending utilization for expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization.

Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use are complete.

Other borrowing costs are recognised as an expense in the period in which they are incurred.

12. Revenue Recognition:

The Company derives revenues primarily from sale of manufactured goods, traded goods and related services.

Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

Revenue is measured based on transaction price which is fair value of the consideration received or receivable, after deduction of any discounts, sales incentives / schemes and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and sales incentives / schemes. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

The Company recognises provision for sales return, based on the historical results, measured on net basis of the margin of the sale. An estimate is made of goods that will be returned and a liability is recognised for this amount using a best estimate based on accumulated experience.

Dividend income is recognized in statement of profit and loss only when the right to receive payment is established.

Interest income is recognized using the effective interest rate method.

13. Leases:

At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it conveys the right to control the use of an identified asset, for a period of time, in exchange for consideration. If lease asset held land & building are perpetual in nature, than it will be treated as Land & Building.

To assess whether a contract conveys the right to control the use of an identified asset, Company assesses whether the contract involves the use of an identified asset. Use may be specified explicitly or implicitly.

• Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.

• If the supplier has a substantive substitution right, then the asset is not identified.

• Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use

• Company has the right to direct the use of the asset.

• In cases where the usage of the asset is predetermined, the right to direct the use of the asset is determined when Company has the right to use the asset or Company designed the asset in a way that predetermines how and for what purpose it will be used.

At the commencement or modification of a contract, that contains a lease component, Company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices. For leases of property, it is elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

Leasehold land, in the opinion of the management it is perpetual in nature than its treated as freehold land.

As a Lessee:

Company recognizes a right-of-use asset and a lease liability at the lease commencement date.

Right-Of-Use Asset (ROU):

The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.

After the commencement date, a lessee shall measure the right-of-use asset applying cost model, which is Cost less any accumulated depreciation and any accumulated impairment losses and also adjusted for certain re-measurements of the lease liability.

Right-of-use asset is depreciated using straight-line method from the commencement date to the end of the lease term. If the lease transfers the ownership of the underlying asset to the Company at the end of the lease term or the cost of the right-of-use asset reflects Company will exercise the purchase option, ROU will be depreciated over the useful life of the underlying asset, which is determined based on the same basis as property, plant and equipment.

Lease liability:

Lease liability is initially measured at the present value of lease payments that are not paid at the commencement date. Discounting is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then using Company''s incremental borrowing rate. Incremental borrowing rate is

determined based on entity''s borrowing rate adjusted for terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprises of fixed payments (including in substance fixed payments), variable lease payments that depends on an index or a rate, initially measured using the index or rate at the commencement date, amount expected to be payable under a residual value guarantee, the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

Lease liability is measured at amortised cost using the effective interest method. Lease liability is re- measured when there is a change in the lease term, a change in its assessment of whether it will exercise a purchase, extension or termination option or a revised in-substance fixed lease payment, a change in the amounts expected to be payable under a residual value guarantee and a change in future lease payments arising from change in an index or rate.

When the lease liability is re-measured, corresponding adjustment is made to the carrying amount of the right-of-use asset. If the carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit and loss.

Right-of-use asset is presented under “Property Plant and Equipment” and lease liabilities are presented under “Financial liabilities” in the balance sheet.

Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.

Lessor

At the commencement or modification of a contract, that contains a lease component, Company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices.

At the inception of the lease, it is determined whether it is a finance lease or an operating lease. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then it is a financial lease, otherwise it is an operating lease.

If the lease arrangement contains lease and non-lease components, then the consideration in the contract is allocated using the principles of Ind AS 115. The Company tests for the impairment losses at the year end. Payment received under operating lease is recognised as income on straight line basis, over the lease term.

The accounting policies applicable to the Company as a lessor, in the comparative period, were not different from Ind AS 116.

14. Impairment of non-financial assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods which no longer exists or may

have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets, such reversal is not recognised.

15. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand, INR Value of Foreign Currency in hand and short-term deposits with remaining maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

16. Taxation:

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 OCI.

16.1 Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year anc any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; and

b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Uncertain Tax position:

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. The provision is estimated based on one of two methods, the expected value method (the sum of the probability weighted amounts in a range of possible outcomes) or the single most likely amount method, depending on which is expected to better predict the resolution of the uncertainty.

16.2 Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and associates to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available, against which they can be used. Deferred tax assets are reviewed at each

reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

b) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Deferred tax assets / liabilities in respect of on temporary differences, which originate and reverse during the tax holiday period are not recognised. Deferred tax assets / liabilities in respect of temporary differences that originate during the tax holiday period but reverse after the tax holiday period are recognised.