Accounting Policies of Balu Forge Industries Ltd. Company

Mar 31, 2025

5. SUMMARY OF MATERIAL ACCOUNTING POLICIES

5.1. Current and non-current classification

The Company classifies all assets and liabilities as current
or non-current based on its normal operating cycle and
the criteria specified under Indian Accounting Standards
(Ind AS) and Schedule III of the Companies Act, 2013.
Considering the nature of its services and the timeframe
in which cash and cash equivalents are realized, the
Company has determined its operating cycle to be twelve
months for the purpose of distinguishing current and non¬
current assets and liabilities.

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

The applicable Ind AS are mandated under Section 133
of the Companies Act, 2013, read together with Rule 3
of the Companies (Indian Accounting Standards) Rules,
2015, along with subsequent amendments. The Company
has consistently applied its accounting policies except
where a new accounting standard has been adopted
for the first time or where a revision to an existing
standard has required a change in the accounting policy
previously followed.

These Financial Statements are presented in Indian
Rupees (H), which is the Company''s functional currency.
Unless stated otherwise, all financial figures have been
rounded off to the nearest two decimal places in Lakhs.

5.2. Use of Estimates and Judgements

In the preparation of the standalone financial statements,
the Company makes judgements in the application of
accounting policies; and estimates and assumptions
which affects the carrying values of assets and liabilities
that are not readily apparent from other sources.

The estimates and associated assumptions are based on
historical experience, future outlook and other factors that
are considered to be relevant. Actual results may differ
from these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
and future periods affected.

The Company uses the following critical accounting

estimates and judgements in preparation of its standalone

financial statements.

5.2.1. Impairment

The Company determines the recoverable amount
of its cash-generating units (CGUs) by estimating
future cash flows, taking into account current
economic conditions and trends, projected operating
performance and growth rates, as well as anticipated
future economic and regulatory environments.
These cash flow estimates are prepared using the
Company''s internal forecasts. The estimated future
cash flows are then discounted to their present value
using an appropriate discount rate.

5.2.2. The measurement of impairment for financial
assets (other than those subsequently measured
at fair value)

The measurement of impairment of financial assets
requires the application of estimates and judgments,
which are further detailed in the note on financial
instruments under the section "Impairment of
Financial Assets."

5.2.3. Useful lives of property, plant and equipment,
right-of-use assets and intangible assets

The Company reviews the estimated useful lives of
property, plant and equipment, right-of-use assets,
and intangible assets at the end of each reporting
period. Any reassessment may lead to changes
in depreciation and amortisation expenses in
future periods.

5.2.4. Provisions and contingent liabilities

A provision is recognized when the Company has a
present obligation, either legal or constructive, arising
from past events, and it is probable that an outflow
of resources will be required to settle the obligation,
provided a reliable estimate can be made. This includes
provisions for decommissioning, site restoration, and
environmental obligations, which may be adjusted if
changes in estimated reserves affect expectations
regarding the timing or cost of these activities. All
provisions are reviewed at each balance sheet date and
updated to reflect the current best estimates.

Significant judgments are applied by the Company in
assessing contingent liabilities. Contingent liabilities
are disclosed when there is a possible obligation
from past events whose existence will be confirmed
only by the occurrence or non-occurrence of one or
more uncertain future events beyond the Company''s
control, or where a present obligation exists but
either the outflow of resources is not probable or the
amount cannot be reliably estimated.

Contingent assets are neither recognized nor
disclosed in the standalone financial statements.

5.2.5. Fair value measurements of financial instruments

When the fair value of financial assets and financial
liabilities recognized in the balance sheet cannot
be determined based on quoted prices in active
markets, the Company measures fair value using
valuation techniques, such as the Discounted Cash
Flow (DCF) model. Wherever possible, inputs to these
models are derived from observable market data.
However, when observable data is not available,
the Company applies judgment to establish fair
values, considering factors such as liquidity risk,
credit risk, and market volatility. Changes in these
assumptions could impact the reported fair value of
financial instruments.

5.2.6. Leases

The Company assesses whether an arrangement
qualifies as a lease in accordance with Ind AS 116,
"Leases." Determining whether an arrangement
contains a lease involves significant judgment,
including evaluation of the terms and conditions
such as the lease term, expected renewals, and
the applicable discount rate. Lease payments are
discounted using the interest rate implicit in the
lease, if this rate can be readily identified. If not, the
Company applies its incremental borrowing rate.

5.2.7. Retirement Benefit Obligations

The Company''s retirement benefit obligations
are based on several key assumptions, including
discount rates, inflation rates, salary growth,
and mortality rates. These assumptions require
significant judgment, and any changes to them
could materially impact the amounts recognized in
the balance sheet and the statement of profit and
loss. The Company establishes these assumptions
based on historical experience and advice from
independent actuaries. These assumptions are
reviewed annually and updated to reflect actuarial
valuations and experience adjustments.

5.3. Property, Plant and Equipment (PPE)

The cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any
directly attributable expenditure on making the asset
ready for its intended use, including relevant borrowing
costs for qualifying assets and any expected costs of
decommissioning. Expenditure incurred after the property,
plant and equipment have been put into operation, such as
repairs and maintenance, are charged to the Statement of
Profit and Loss in the year in which the costs are incurred.
Major shut-down and overhaul expenditure is capitalised
as the activities undertaken improves the economic
benefits expected to arise from the asset.

An item of property, plant and equipment is derecognized
upon disposal or when no future economic benefits are

expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying
amount of the asset and is recognised in Statement of
Profit and Loss.

The Company has elected to continue with the carrying
value for all of its property, plant and equipment as
recognised in the standalone financial statements of M/s.
Balu India, proprietary concern, measured as per the
previous GAAP and use that as its deemed cost as at the
date of succession.

Capital Work-in-Progress

These are stated at cost to date relating to projects in
progress, incurred during construction / pre-operative
period (Net of income) incurred during the construction/
pre-operative period and the same is allocated to the
respective property, plant and equipment on the completion
of their construction. Property, plant and equipment not
ready for the intended use on the date of the Balance
Sheet are disclosed as "capital work-in- progress".

Intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business succession is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.

Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is
recognised on a straight-line basis over their estimated
useful lives. The estimated useful life and amortisation
method are reviewed at the end of each reporting year,
with the effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with indefinite
useful lives that are acquired separately are carried at cost
less accumulated impairment losses.

Depreciation & amortization

Property, plant and equipment except freehold land
held for use in the production, supply or administrative
purposes, are stated in the balance sheet at cost less
accumulated depreciation and accumulated impairment
losses, if any.

Depreciable amount for assets is the cost of an asset,
or other amount substituted for cost, less its estimated
residual value. Depreciation is recognised so as to write off

the cost of assets (other than freehold land and properties
under construction) less their residual values over their
useful lives, using straight-line method as per the useful
life prescribed in Schedule II to the Companies Act, 2013.
The Company has redefined the useful life / residual value
of assets acquired on business succession in accordance
with the terms and conditions set out in the Business
Succession Agreement dated 3 August 2022, on the basis
of detailed technical analysis , taking into account the
nature of the asset, the operating conditions of the asset,
past history of replacement, anticipated technological
changes, manufacturers warranties and maintenance
support, etc. which is depicted in below mentioned table.

Impairment of non-financial assets

At the end of each reporting year, the Company reviews
the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those
assets have suffered an impairment loss. 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).

Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment
at least annually, and whenever there is an indication that
the asset may be impaired.

Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than it''s carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised immediately in the Statement of Profit and Loss.

The carrying amounts of the Company''s non-financial
assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such
indication exists, then the asset''s recoverable amount
is estimated in order to determine the extent of the
impairment loss, if any.

5.4. Investments in subsidiaries, associates and joint
ventures

The investments in subsidiaries, associates and joint
ventures are carried in these standalone financial
statements at historical ''cost'' in accordance with the
option available in Ind AS 27, except when the investment,
or a portion thereof, is classified as held for sale, in which
case it is accounted for as Non-current assets held for
sale and discontinued operations. Where the carrying
amount of an investment is greater than its estimated
recoverable amount, it is written down immediately to its
recoverable amount and the difference is transferred to
the Statement of Profit and Loss. On disposal of investment
the difference between the net disposal proceeds and the
carrying amount is charged or credited to the Statement
of Profit and Loss

5.5. Inventories

Inventories are valued at lower of cost on First-In- First-Out
(FIFO) or net realizable value after providing for obsolescence
and other losses, where considered necessary.

Cost of raw materials comprises all costs of purchase and
other costs incurred in bringing the inventories to their
present location and condition. Cost of finished goods
and work in progress include cost of direct materials and
labor and a proportion of manufacturing and other indirect
overheads based on the normal operating capacity but
excluding borrowing costs. Cost of purchased inventory is
determined after deducting rebates and discounts.

Net realizable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and estimated costs necessary
to make the sale.

5.6. Revenue Recognition
i. Sale of goods

Revenue is measured at the fair value of the
consideration received or receivable. The Company
recognises revenues on sale of products, net of
discounts, sales incentives, rebates granted, returns,
sales taxes/GST and duties when the products are
delivered to customer or when delivered to a carrier
for export sale, which is when title and risk and
rewards of ownership pass to the customer. Export
incentives are recognised as income as per the
terms of the scheme in respect of the exports made
and included as part of export turnover.

Revenue from sales is recognised when control
of the products has transferred, being when the
products are delivered to the customer, the customer
has full discretion over the channel and price to sell
/ consume the products, and there is no unfulfilled
obligation that could affect the customer''s acceptance
of the products. Delivery occurs when the products
have been shipped to the specific location, the risks
of obsolescence and loss have been transferred to

the customer, and either the customer has accepted
the products in accordance with the sales contract or
the acceptance provisions have lapsed.

ii. Interest and dividend income

Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset''s net carrying amount on initial recognition.

Dividend income from investments is recognized
when the shareholder''s right to receive payment has
been established.

5.7. Leases
As a lessee

The Company assesses whether a contract is or contains
a lease, at inception of the contract. That is, if the contract
conveys the right to control the use of an identied asset
for a period of time in exchange for consideration. The
Company applies a single recognition and measurement
approach for all leases, except for short-term leases
having lease term of 12 months or less and leases
of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets..

Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. and includes
the net present value of the following lease payments:

• Lease payments less any lease incentives receivable

• Variable lease payments that are based on an
index or a rate

• Amounts expected to be payable by the Company
under residual value guarantees, if any

• Exercise price of the purchase option, if

the Company is reasonably certain to exercise
that option, and

• Payments of penalties for terminating the
lease, if the lease term reflects the Company
exercising that option.

The lease payments are discounted using Company''s
incremental borrowing rate (since the interest rate implicit
in the lease cannot be readily determined). Incremental
borrowing rate is the rate of interest that the Company
would have to pay to borrow over a similar term, and a
similar security, the funds necessary to obtain an asset

of a similar value to the right-of-use asset in a similar
economic environment.

Variable lease payments that depend on any key variable
/ condition, are recognised in profit or loss in the period in
which the condition that triggers those payments occurs.

In case of sale and leaseback transactions, the Company
first considers whether the initial transfer of the
underlying asset to the buyer-lessor is a sale by applying
the requirements of Ind AS 115. If the transfer qualifies as
a sale and the transaction is at market terms, the Company
effectively derecognises the asset, recognises a ROU asset
and corresponding lease liability. When the lease liability
is remeasured, the corresponding adjustment is reflected
in the right-of-use asset or Statement of profit and loss, as
the case may be.

Right-of-use assets

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

• The amount of the initial measurement of

lease liability

• Any lease payments made at or before

the commencement date less any lease

incentives received

• Any initial direct costs and

• Restoration costs.

Right-of-use assets are depreciated over the lease term
on a straight-line basis.

Short-term leases and leases of low-value assets

Payments associated with short-term leases of plant and
equipment, buildings and all leases of low-value assets
are recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with lease
term of 12 months or less.

As a lessor:

Lease income from operating leases where the Company
is a lessor is recognised in income on a straight-line basis
over the lease term.

5.8. Foreign Currency Transactions

The functional currency of the Company is Indian
National Rupee (H).

The transactions in currencies other than the entity''s
functional currency (foreign currencies) are recognised
at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting year, monetary

items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the
date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a
foreign currency are not retranslated.

Exchange differences on monetary items are recognized
in Statement of Profit and Loss in the year in which they
arise except for exchange differences on foreign currency
borrowings relating to assets under construction for
future productive use, which are included in the cost of
those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings.

5.9 Income taxes

The income tax expense or credit for the period is the tax
payable on the current period''s taxable income based
on the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to
unused tax losses..

Current tax

The Company calculates current tax using the tax rates
that have been enacted or substantively enacted by the
end of the reporting period in India, where it operates and
generates taxable income.

Management regularly reviews positions taken in tax
filings, especially in cases where tax regulations are
open to interpretation. Provisions are recognized as
necessary based on the amounts expected to be paid to
the tax authorities..

Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in
the standalone financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised
for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against
which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from the
initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting year and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to
be recovered. Unrecognised deferred tax assets are re-

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

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

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

Current and deferred tax for the year

Current and deferred tax are recognised in profit and
loss, except when they are relating 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.

Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its
current tax assets and liabilities on a net basis.

5.10. Borrowing Cost

Borrowing costs, general or specific, that are directly
attributable to the acquisition or construction of qualifying
assets is capitalised as part of such assets. A qualifying
asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing
costs are charged to the Statement of Profit and Loss.

The Company determines the amount of borrowing
costs eligible for capitalisation as the actual borrowing
costs incurred on that borrowing during the year less
any interest income earned on temporary investment
of specific borrowings pending their expenditure on
qualifying assets, to the extent that an entity borrows
funds specifically for the purpose of obtaining a qualifying
asset. In case if the Company borrows generally and uses
the funds for obtaining a qualifying asset, borrowing costs
eligible for capitalisation are determined by applying a
capitalisation rate to the expenditures on that asset.

---

Mar 31, 2024

5. MATERIAL ACCOUNTING POLICIES

a. Property, Plant and Equipment (PPE)

The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit and Loss in the year in which the costs are incurred. Major shut-down and overhaul expenditure is capitalised as the activities undertaken improves the economic benefits expected to arise from the asset. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.

Capital Work-in-Progress

These are stated at cost to date relating to projects in progress, incurred during construction / pre-operative period (Net of income) incurred during the construction/ pre-operative period and the same is allocated to the respective property, plant and equipment on the completion of their construction. Property, plant and equipment not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in- progress".

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business succession is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives that are acquired separately are carried at cost less

accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting year, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Estimated useful lives of the intangible assets are as follows:

Sr. No.	Asset Head	useful life
1	Software	5

Depreciation & amortization

Property, plant and equipment except freehold land held for use in the production, supply or administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses, if any.

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013. The Company has redefined the useful life / residual value of assets acquired on business succession in accordance with the terms and conditions set out in the Business Succession Agreement dated 3 August 2020. On the basis of detailed technical analysis , taking into account the nature of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc. which is depicted in below mentioned table.

Sr. No.	Asset Head	Useful life
1	Plant & Machinery	15
2	Office Equipment	5
3	Computers	3
4	Motor Vehicle	8-10
5	Electrical Installation	10
6	Factory building	30
7	Furniture & Fixtures	10
8	Computers - Server & Networks	6

Impairment of non-financial assets

At the end of each reporting year, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. 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).

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than it''s carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss.

The carrying amounts of the Company''s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated in order to determine the extent of the impairment loss, if any.

b. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses,

if any. Goodwill is not amortised but it is tested for impairment.

For the purposes of impairment testing, goodwill is allocated to each of the Group''s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based

on the carrying amount of each asset in the unit. Any impairment toss for goodwill is recognised directly in the Consolidated Statement of Profit and Loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the

determination of the profit or loss on disposal.

c. Investments in subsidiaries, associates and joint ventures

The investments in subsidiaries, associates and joint ventures are carried in these financial statements at historical ''cost'' in accordance with the option available in Ind AS 27, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for as Non-current assets held for sale and discontinued operations. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss

d. Inventories

Inventories are valued at lower of cost on First-InFirst-Out (FIFO) or net realizable value after providing for obsolescence and other losses, where considered necessary.

Cost of raw materials comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost of finished goods and work in progress include cost of direct materials and labor and a proportion of manufacturing and other indirect overheads based on the normal operating capacity but excluding borrowing costs. Cost of purchased inventory is determined after deducting rebates and discounts.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

e. Revenue Recognition

i. Sale of goods

Revenue is measured at the fair value of the consideration received or receivable. The Company recognises revenues on sale of products, net of discounts, sales incentives, rebates granted, returns, sales taxes/GST and duties when the

products are delivered to customer or when delivered to a carrier for export sale, which is when title and risk and rewards of ownership pass to the customer. Export incentives are recognised as income as per the terms of the scheme in respect of the exports made and included as part of export turnover.

Revenue from sales is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell / consume the products, and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract or the acceptance provisions have lapsed.

ii. sale of services

Revenue from sale of Services

Revenue from services is recognised in accordance with the terms of the relevant agreement(s) as generally accepted and agreed with the customers and when control transfers and the company/s performance obligation are satisfied.

Income from Export Benefits and Other Incentives Export benefits available under prevalent schemes are accrued as revenue in the year in which the goods are exported and / or services are rendered only when there reasonable assurance that the conditions attached to them will be complied with, and the amounts will be received.

iii. Interest and dividend income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Dividend income from investments is recognized when the shareholder''s right to receive payment has been established. (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).

f. Leases

The Company has adopted Ind AS 116 "Leases" and accordingly accounted for leases as below:

As a lessee

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

Payments associated with short-term leases and leases of low-value assets are recognised on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 3 years or less.

Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right- of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right- of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. Right-of-use assets are subject to impairment test.

Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.

The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

As a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

g. Foreign Currency Transactions

The functional currency of the Company is Indian National Rupee (INR).

The transactions in currencies other than the entity''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognized in Statement of Profit and Loss in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

h. Income taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Current tax is the amount of expected tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are re- assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

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

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

Current and deferred tax for the year

Current and deferred tax are recognised in profit and loss, except when they are relating 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.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.

i. Borrowing Cost

Borrowing costs, general or specific, that are directly attributable to the acquisition or construction of qualifying assets is capitalised as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

The Company determines the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the year less any interest income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets, to the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset. In case if the Company borrows generally and uses the funds for obtaining a qualifying asset, borrowing costs eligible for capitalisation are determined by applying a capitalisation rate to the expenditures on that asset.

---

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

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

a. Property, Plant and Equipment (PPE)

The cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any
directly attributable expenditure on making the asset
ready for its intended use, including relevant borrowing
costs for qualifying assets and any expected costs of
decommissioning. Expenditure incurred after the property,
plant and equipment have been put into operation, such as
repairs and maintenance, are charged to the Statement of
Profit and Loss in the year in which the costs are incurred.
Major shut-down and overhaul expenditure is capitalised
as the activities undertaken improves the economic
benefits expected to arise from the asset.

An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an item
of property, pl ant and equipment is determined as the
difference between the sales proceeds and the carrying
amount of the asset and is recognised in Statement of
Profit and Loss.

The Company has elected to continue with the carrying
value for all of its property, plant and equipment as

recognised in the financial statements of M/s. Balu India,
proprietary concern, measured as per the previous GAAP
and use that as its deemed cost as at the date of succession.

Capital Work-in-Progress

These are stated at cost to date relating to projects in
progress, incurred during construction / pre-operative
period (Net of income) incurred during the construction/
pre-operative period and the same is allocated to the
respective property, plant and equipment on the completion
of their construction. Property, plant and equipment not
ready for the intended use on the date of the Balance Sheet
are disclosed as "capital work-in- progress".

Intangible assets

I ntangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business succession is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.

Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of
each reporting year, with the effect of any changes in
estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated
impairment losses.

Depreciation & amortization

Property, plant and equipment except freehold land
held for use in the production, supply or administrative
purposes, are stated in the balance sheet at cost less
accumulated depreciation and accumulated impairment
losses, if any.

Depreciable amount for assets is the cost of an asset,
or other amount substituted for cost, less its estimated
residual value. Depreciation is recognised so as to write off
the cost of assets (other than freehold land and properties
under construction) less their residual values over their
useful lives, using straight-line method as per the useful
life prescribed in Schedule II to the Companies Act, 2013.
The Company has redefined the useful life / residual value
of assets acquired on business succession in accordance

with the terms and conditions set out in the Business
Succession Agreement dated 3 August 2022, on the basis
of detailed technical analysis, taking into account the
nature of the asset, the operating conditions of the asset,
past history of replacement, anticipated technological
changes, manufacturers warranties and maintenance
support, etc. which is depicted in below mentioned table.

Impairment of non-financial assets

At the end of each reporting year, the Company reviews the
carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. 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).

Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment
at least annually, and whenever there is an indication that
the asset may be impaired.

Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than it''s carrying amount, the
carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment
loss is recognised immediately in the Statement of Profit
and Loss.

The carrying amounts of the Company''s non-financial
assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such
indication exists, then the asset''s recoverable amount
is estimated in order to determine the extent of the
impairment loss, if any.

b. Goodwill

Goodwill arising on an acquisition of a business is carried
at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
Goodwill is not amortised but it is tested for impairment.

For the purposes of impairment testing, goodwill is
allocated to each of the Group''s cash-generating units
(or groups of cash-generating units) that is expected to
benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss
is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro rata based on the carrying amount of each
asset in the unit. Any impairment loss for goodwill is
recognised directly in the Consolidated Statement of Profit
and Loss. An impairment loss recognised for goodwill is
not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the
determination of the profit or loss on disposal.

c. Investments in subsidiaries, associates and joint
ventures

The investments in subsidiaries, associates and joint
ventures are carried in these financial statements at
historical ‘cost'' in accordance with the option available in
Ind AS 27, except when the investment, or a portion thereof,
is classified as held for sale, in which case it is accounted
for as Non-current assets held for sale and discontinued
operations. Where the carrying amount of an investment
is greater than its estimated recoverable amount, it is
written down immediately to its recoverable amount and
the difference is transferred to the Statement of Profit and
Loss. On disposal of investment the difference between
the net disposal proceeds and the carrying amount is
charged or credited to the Statement of Profit and Loss.

d. Inventories

Inventories are valued at lower of cost on First-
In- First-Out (FIFO) or net realizable value after
providing for obsolescence and other losses, where
considered necessary.

Cost of raw materials comprises all costs of purchase and
other costs incurred in bringing the inventories to their
present location and condition. Cost of finished goods
and work in progress include cost of direct materials and
labor and a proportion of manufacturing and other indirect

overheads based on the normal operating capacity
but excluding

borrowing costs. Cost of purchased inventory is
determined after deducting rebates and discounts.

Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and estimated costs necessary to make
the sale.

e. Revenue Recognitioni. Sale of goods

Revenue is measured at the fair value of the
consideration received or receivable. The Company
recognises revenues on sale of products, net of
discounts, sales incentives, rebates granted, returns,
sales taxes/GST and duties when the products are
delivered to customer or when delivered to a carrier
for export sale, which is when title and risk and
rewards of ownership pass to the customer. Export
incentives are recognised as income as per the terms
of the scheme in respect of the exports made and
included as part of export turnover.

Revenue from sales is recognised when control of the
products has transferred, being when the products
are delivered to the customer, the customer has
full discretion over the channel and price to sell /
consume the products, and there is no unfulfilled
obligation that could affect the customer''s acceptance
of the products. Delivery occurs when the products
have been shipped to the specific location, the risks
of obsolescence and loss have been transferred to
the customer, and either the customer has accepted
the products in accordance with the sales contract or
the acceptance provisions have lapsed.

ii. Interest and dividend income

Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to that asset''s net carrying amount on
initial recognition.

Dividend income from investments is recognized
when the shareholder''s right to receive payment has
been established (provided that it is probable that the
economic benefits will flow to the Company and the
amount of income can be measured reliably).

f. Leases

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

As a lessee

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

Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right- of-use
assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made
at or before the commencement date less any lease
incentives received. Unless the Company is reasonably
certain to obtain ownership of the leased asset at the end
of the lease term, the recognised right- of-use assets are
depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term.

If ownership of the leased asset transfers to the Company
at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the
estimated useful life of the asset. Right-of-use assets are
subject to impairment test.

Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under
residual value guarantees.

The variable lease payments that do not depend on an index
or a rate are recognised as expense in the period on which
the event or condition that triggers the payment occurs.

I n calculating the present value of lease payments, the
Company uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease
is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments

made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the
lease term, a change in the lease payments (e.g., changes
to future payments resulting from a change in an index
or rate used to determine such lease payments) or a
change in the assessment of an option to purchase the
underlying asset.

As a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases.
Rental income arising is accounted for on a straight-line
basis over the lease terms. Initial direct costs incurred in
negotiating and arranging an operating lease are added to
the carrying amount of the leased asset and recognized
over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period
in which they are earned.

Short-term leases and leases of low-value assets
Payments associated with short-term leases and leases
of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less.

g. Foreign Currency Transactions

The functional currency of the Company is determined on
the basis of the primary economic environment in which it
operates. The functional currency of the Company is Indian
National Rupee (INR).

The transactions in currencies other than the entity''s
functional currency (foreign currencies) are recognised
at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting year, monetary
items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the
date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a
foreign currency are not retranslated.

Exchange differences on monetary items are recognized
in Statement of Profit and Loss in the year in which they
arise except for exchange differences on foreign currency
borrowings relating to assets under construction for
future productive use, which are included in the cost of
those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings.

h. Income taxes

Income tax expense represents the sum of the tax currently
payable and deferred tax.

Current tax

Current tax is the amount of expected tax payable based on
the taxable profit for the year as determined in accordance
with the applicable tax rates and the provisions of the
Income Tax Act, 1961.

Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred
tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised for all
deductible temporary differences to the extent that it
is probable that taxable profits will be available against
which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from the
initial recognition (other than in a business combination) of
assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting year and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to
be recovered. Unrecognised deferred tax assets are re¬
assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.

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

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

Current and deferred tax for the year

Current and deferred tax are recognised in profit and
loss, except when they are relating 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 k
equity respectively.

Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation authority
and the relevant entity intends to settle its current tax
assets and liabilities on a net basis.

i. Borrowing Cost

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

All other borrowing costs are recognised in the Statement
of Profit and Loss in the year in which they are incurred.

The Company determines the amount of borrowing
costs eligible for capitalisation as the actual borrowing
costs incurred on that borrowing during the year less
any interest income earned on temporary investment
of specific borrowings pending their expenditure on
qualifying assets, to the extent that an entity borrows
funds specifically for the purpose of obtaining a qualifying
asset. In case if the Company borrows generally and uses
the funds for obtaining a qualifying asset, borrowing costs
eligible for capitalisation are determined by applying a
capitalisation rate to the expenditures on that asset.

---

Mar 31, 2014

Not Available.

---

Mar 31, 2012

(a) The company follows the accrual system of accounting in accordance with the requirements of the Companies Act, 1956 and complies with the accounting standards referred to in sub-section (3C) of Section 211 of the said Act.

(b) The accounts are prepared on historical cost basis and on the basis of going concern. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles.

---

Mar 31, 2011

1. The financial statements have been prepared on the historical cost convention and in accordance with normally accepted accounting principles.

2. Fixed assets are valued at historical cost less depreciation which has been provided according to written down value method.

3. The expenses incurred are accounted for on accrual basis.

4. The income earned are accounted for on accrual basis.

---

Mar 31, 2010

1) BASIS OF ACCOUNTING :

Financial statement are prepared under historical cost convention on going concern basis

2) FIXED ASSETS:

Fixed Assets are recorded at cost inclusive of inword frieght, duties, Insurance & Taxes and incidental expenses related to acqusition.

3) DEPRECIATION:

Depreciation is provided in the manner specified in Schedule XIV to the Companies Act 1956. in the earlier But no depreciation is provided for the financial year 2009-10.

4) INVESTMENTS:

Investments are carried at cost.

5) INVENTORIES VALUATION :

Items of inventory are valued on the basis given below :

a) Raw materials : At cost or market value whichever is lower.

b) Process stock : At cost

c) Finished stock : At cost or market value whichever is lower.

6) METHOD OF ACCOUNTING :

Mercantile System of Accounting is followed.